How to Reduce AGI With Alimony Payments
AGI--adjusted gross income--is your gross income minus allowable tax deductions. Some of the allowable deductions are education deductions, moving expenses and alimony payments. Most of these have some stipulations attached for you to take the deduction--alimony payments are no exception. The nice thing about them is you do not have to itemize deductions to take them. Read on to learn how to reduce AGI with alimony payments.
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Instructions
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1
Know where to put the amount on your 1040. Lines 23 to 35 are the places where you enter the allowable deductions. Alimony is income to the one receiving it and an expense to the one paying it. To deduct it from your AGI enter the gross amount on line 31.
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2
Calculate the amount. If the amount of alimony you paid for the year includes child support, you must adjust the amount. You can only deduct the alimony payments--child support is not a tax deduction.
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Enter the amount. On line 31a, you enter the amount of alimony you paid to your ex-spouse; on line 31b you need to enter the ex-spouse's social security number.
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Know whether you qualify to deduct the alimony you paid. There are six stipulations in order to be able to claim alimony--you do not file a joint return with the person you paid the alimony to; the payments are made in cash, check or money order; there is nothing to stipulate that the payments are not alimony; you are not members of the same household with the person you are paying the alimony to; you don't need to make payments after the death of the person you are paying alimony to and finally the alimony payment is not considered child support.
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Consult a tax preparer. If you have any questions on any of the requirements, you should consult a tax preparer. Otherwise, reduce your AGI by your alimony payments.
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Tips & Warnings
Alimony is income for the person receiving it and a deduction for the person paying it.
Always consult an expert before you file your tax return if you have any doubt.
Be sure your alimony does not include child support, since that is not a tax deduction.
