Alimony records can settle disputes and provide IRS with answers

Alimony records can settle disputes and provide IRS with answers

Whether you have been ordered to pay or are the recipient of alimony, it is extremely important that you keep accurate records of all your spousal support-related activities. Your records could be used in a variety of ways. Records can be used in your defense if you are accused of not adhering to your obligations or if your ex is not keeping up with payments.

You also want to have documentation of your transactions for tax purposes. Typically, for those receiving payments, the money is considered taxable income. Conversely, if you are paying alimony, your payments can be deducted on your return.

If you are paying alimony, you should create a document that lists your payments and notes the dates of payments, check numbers and the addresses where the check was sent. You also want to retain the canceled check. If you make your payments in cash, you want to get signed receipts for each transaction.

If you are receiving alimony, you also want to keep a detailed inventory of all the checks used to make payments. And both payer and payee should keep their records for a minimum of three years to have on hand in case of an IRS audit.

If you should ever get into a dispute regarding alimony obligations, your records could play a pivotal role in your ability to prove your side of the story. In addition, you may also want to enlist the services of an experienced family law attorney. The attorney could represent your interests and help you get the dispute resolved in a manner that gives you your best possible outcome.

2022-04-06T12:46:29+00:0024 Jul 2016|
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