If you and your spouse are currently facing a divorce, you may be ordered to make alimony payments. But how does alimony work? And how exactly is it determined? Find out below.
How Does the Court Determine Who Pays What?
Generally, the spouse that earns substantially more money is ordered to make alimony payments. These monthly payments, sometimes known as “spousal support” or “maintenance”, are pre-determined by the court in order to provide financial support to the low income spouse. However, if your marriage is short lived, or if you and your spouse’s incomes are similar, alimony payments will most likely not be ordered.
If your spouse is awarded alimony, you will need to make payments each month until:
- The date set by your judge (usually several years later)
- Your ex-spouse remarries
- Your children reach an age where a full-time parent isn’t needed
- The court determines, after a reasonable time, that your spouse has neglected to become partially self-supporting
- Other significant events occur, such as a retirement or successfully convincing the judge to modify the payment amount
- Either you or your spouse dies
While you and your spouse can agree to length terms and payment amount, if you cannot agree, the court will determine those factors instead. With a court decision comes a trial, which can be time consuming and costly. Fortunately, seeking guidance from a family law attorney can help each party come to an agreement and avoid a trial.
What to Expect When Making Alimony Payments
Being ordered to make alimony payments does not make you a bad person. In most cases, it simply means that you make more money than your spouse. For more than 100 years, people have been ordered to pay alimony, and while it’s ordered less frequently today, it is still around. If you’re ordered to pay alimony, you will be legally obligated to make monthly payments of a predetermined amount.
What to Expect When Receiving Alimony Payments
Looking at your ability to earn will help determine if you’re eligible to receive alimony. Remember that this does not necessarily mean what you’re earning by the time you go to trial. Often, if you are awarded alimony, you will be requested to make life and work changes. For example, if you’re working a part-time, low income job, you can be required to find a full-time job in a higher paying field. If you have not been fully employed for a while, vocational evaluators can be hired to report your current job prospects to the court. These evaluators will administer a vocational test and share your experience and credentials with prospective employers to determine how much income you could make.
Keep Detailed Records for Tax Purposes
Whether you make or receive alimony payments, it is vital that you keep detailed records. For the paying spouse, alimony is tax-deductible, and for the support spouse, it constitutes taxable income. Without detailed records, you can lose your tax deduction or be required to pay back support if the IRS challenges the amount or a dispute arises.
Important notice: under a 2017 Republican Tax Bill, starting January 1st, 2019, alimony will no longer be tax deductible or required to report under gross income.
Here is a breakdown the records both parties should keep:
The spouse required to pay alimony should keep:
- a detailed list of each payment (including the date, address, and check number)
- the original check used for each payment–include a note for the month of support each check was used
- get receipts for each payment, with recipient’s signature, if you pay in cash
Keep these records for at least three years from when you file the tax return deducting your payments.
The spouse awarded alimony should keep a list of each payment received and include the following information:
- date of each payment received
- amount of each payment
- check or money order number
- account number
- name of bank of each payment
- a photocopy of the check
- copy of any signed receipt for cash payments
What Happens If Your Spouse Refuses to Pay?
If your spouse refuses to pay, seek legal action immediately. Alimony payment orders have the same power as other court orders. Seeking legal action is the best course for obtaining your payments. Sometimes the court can jail a reluctant payer to show they’re serious.
Speak to an Alimony Lawyer Today
To learn more, contact the Law Offices of Rick D. Banks.