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How to make sure alimony is tax deductible

In Ohio divorces, alimony is meant to help a lower-earning spouse make ends meet for a set duration or indeterminate amount of time. Fortunately, alimony payments may be deductible by the paying spouse as long as the order or agreement complies with Internal Revenue Service rules.

According to the IRS, alimony is only deductible if it meets certain guidelines. If it does not, then the spouse who pays it may not deduct it on their tax returns. If the alimony does comply, then the spouse may deduct it, potentially saving hundreds or thousands of dollars each year.

Alimony payments that are made from one spouse to the other but aren't pursuant to an agreement or order are not deductible. All payments have to be paid in cash or its equivalent, and the alimony must be paid to the ex-spouses or third parties for their benefit. Alimony that is deemed child support is not deductible. If a general order for support says that a payment is supposed to include both alimony and child support, the amounts of each type of support must be broken down. Only the alimony portion can be deducted. Ex-spouses cannot continue residing together if the paying spouse wants to deduct the support, and they cannot file joint tax returns. Furthermore, all obligations to pay alimony must end when the spouse dies.

Divorce cases may be complicated when there are potential issues of alimony and complex property division matters. People who believe that alimony may be at issue in their cases might benefit by seeking the help of family law attorneys. Lawyers may draft agreements to ensure that they comply with the guidelines that are outlined by the IRS, helping their clients to save money on their taxes.

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