Can I File Taxes If I Get Alimony?
Unlike child support, alimony is treated as taxable income. Failing to report it on your return could result in an IRS audit. As long as you keep accurate records, however, you should have no problem reporting alimony payments on your tax return.
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Definition
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Alimony payments are made under a divorce or separation decree or arrangement. Only payments made in cash (including checks and money orders) meet the criteria to be considered alimony payments. Payments made to a third party at the request of your spouse may count as alimony as long as the payments are intended as alimony payments and the request is made in writing.
Taxation
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Alimony payments are deductible by the payer and should be included on the payee's income tax return. You should report the alimony you received on IRS line 11 of form 1040. You cannot use forms 1040A or 1040EZ to report alimony payments. Also, be sure to give your ex-spouse your Social Security number so that she can claim the deduction on her tax return. Failing to provide the information could make you subject to a $50 IRS penalty, as of January 2011. Partial alimony payments, which include both alimony and child support, are allocated first to child support and then to alimony. For example, if your spouse is responsible for paying child support of $200/month and alimony in the amount of $100 per month and sends you a check for $250, then the first $200 will be allocated for child support and the second $50 for alimony.
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Warning
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Voluntary payments made by the payer are not considered alimony. These payments are not court ordered and are outside the bounds of the alimony payments. Thus, voluntary payments made to you by your ex-spouse should not be included on your tax return. In addition, alimony does not include child support payments, property settlements exchanges or payments to maintain the payer's property. Also, none of the payments made to you are considered alimony if you and your spouse share the same home.
Considerations
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If your alimony decreases or is terminated during the first three years, then the IRS recapture rules may apply. This means that you may be able to deduct in the third year part of the alimony that you previously included as income. If you have additional questions about the recapture rule, call the IRS at 800-829-1040.
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