Family Law

Common tax pitfalls in a divorce

By Robert M. Kisselburgh, Esq.

Common tax issues in a divorce

As a Mississippi divorce lawyer, I've seen my share of tax issues arise during a divorce. Three common tax issues are: whether alimony payments are taxable, whether child support payments are taxable, and which spouse gets to takes the tax exemption for the children.

With regard to alimony, the Internal Revenue Service states that alimony "is a payment to or for a spouse or former spouse under a divorce or separation instrument." To be alimony, certain requirements must be met and the rules are different for documents executed after 1984 and those executed before. However, generally alimony payments are deductible from your gross income for those making alimony payments and generally are included in the gross income of a person receiving alimony payments. Again, a word of caution. You must determine whether you are paying or receiving alimony as defined by the Internal Revenue Service. Additionally, if you are receiving alimony, you may need to make estimated tax payments as no tax is withheld from alimony payments. Again, a qualified tax professional can answer these questions.

Full post as published by Mississippi Family Law Blog on March 28, 2008 (boomark / email).