Alimony and Taxes

Alimony is one of the largest aspects of any divorce arrangement, and people going through a divorce often have many questions about it. Many wonder if alimony is taxable. Alimony is, in fact, taxable, but only the recipient pays taxes on it, as it is a form of income. If the alimony recipient does not list the alimony on his or her income tax, he or she is guilty of fraud.

Because the taxes are being paid by the person receiving the alimony, the person making the payments has no obligation to do so. This would amount to paying taxes twice on the same money. The alimony payments are not counted as gross income, so they do not have to be included as net income on tax forms. If you make $100,000 a year and pay $20,000 a year in income taxes, your net income for tax purposes is $80,000.

Reporting Your Alimony

It is important to list the total amount of alimony you are receiving on your tax forms, as not doing so is tax fraud and has serious repercussions. While your former spouse will not be paying taxes on alimony money, he or she will be listing them as a tax deduction in order to avoid paying taxes on them, which means that the IRS will easily be able to determine if you are not filing taxable income.

Contact Us

If you’re going through a divorce and have concerns about alimony payments, contact San Jose divorce lawyer, Daniel Jensen, of the Law Office of Daniel Jensen, P.C. today by calling 408-296-4100