In our last post, we talked about the tax implications of a divorce and what you need to consider when you and your spouse split. One of the specific examples we referenced was that when spousal support (also called alimony) is involved, the paying spouse can deduct those payments from their taxable income while the receiving spouse has to include those payments in their taxable income.
Today, we will continue the conversation about spousal support and the things that divorcing spouses should remember about this crucial piece of the post-divorce agreement (if it is involved in your case).
If spousal support is involved in your divorce, then you should keep records of these payments and the critical information that they contain. For example, if you are the paying spouse, you should keep a record of when you made the payment, where you sent the payment to, the check amount and check number, a carbon copy of the check (if possible) and the date that the check was cashed.
As the receiving spouse, you should keep much of the same information, with the additional information being the bank that your former spouse uses and the account that the check draws from.
If a check is not used for the payment, then you must be prepared to create your own receipt for the cash transaction. Make sure both spouses sign the receipt and that it has all of the correct information on it.
Source: FindLaw, “Alimony Guidelines: What Records to Keep Regarding Your Alimony,” Accessed Oct. 26, 2016