One of the many issues that have to be resolved in a divorce involves spousal support, sometimes called alimony. Typically, a judge will decide who is responsible for making support payments and who should receive them based on which party earns more income. By ordering one spouse to pay the other support, the courts can balance the economic scales between the divorcing couple. This gives the partner who faces a financial disadvantage from the divorce an opportunity to build a new life. Regardless of who is paying and who is receiving, both spouses will need to keep careful records of supportpayments for tax purposes.

How to Keep Track of Spousal Support Payments 

Records to Keep if Paying 

Spousal support is tax deductible for the individual making payments. Thus, it’s important to maintain detailed records of all payments made during the year, including dates and amounts. Write down the check numbers for each payment made, the address where the checks were sent, photocopies of every canceled check, and receipts for any cash support payments that are made. Having all this documentation on hand will prevent problems with the IRS in the event they question deductions. 

Records to Keep if Receiving 

It’s just as important for those receiving spousal support after a divorce to keep a record of it. They will be required to report this as income on their tax return. Recipients should maintain records that include every payment amount and date received, the check or money order number for the payment, the account number and name of the bank the money was drawn on, and photocopies of all checks received or receipts signed for cash payment. 

It’s best practice to retain all records for at least three years to ensure proof is available should the IRS decide to audit you. If there is any potential an ex-spouse could make false allegations about spousal support payments in the future, everything should be kept organized and filed away permanently. Don’t hesitate to seek legal guidance from the attorneys at Nichols, Speidel & Nichols whether you’re just beginning the divorce process or are facing an alimony challenge. Having served the residents of Clermont County, OH, for over 90 years, the law firm has helped numerous clients protect their rights when ending a marriage. Call (513) 732-1420 or visit them online for more information.