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If you pay or receive alimony, then this post is for you

Alimony is an important factor in many divorces. Often called spousal support, alimony sees one of the former spouses pay his or her ex-spouse to fulfill a financial need of that spouse. The paying spouse also has to have the financial ability to pay alimony without detriment to his or her ability to live. In addition, alimony isn't something that is guaranteed to be awarded in any divorce.

With those basic steps covered about alimony, let's talk about some of the procedural and record-keeping steps that spouse should take when they are either paying or receiving alimony:

  • First of all, your alimony will affect your tax filing no matter what side of the alimony equation you are on. If you pay alimony, those payments can be used as deductions on your taxes. And if you receive alimony, you will have to include that in your filing as part of your income, which could bump you up into a higher tax bracket.
  • When it comes to the alimony payments themselves, each spouse should take meticulous notes on the payments. In fact, for the paying spouse, it is a very good idea to get a checkbook that will make carbon copies of checks you write.
  • The records you keep should include detailed information. The amount of the payment; the date of the payment; the check number and bank used for the payment; the address the payment was sent to or received at; these are all crucial pieces of information.
  • Should the paying spouse prefer to pay in cash, it is vital that the two spouses create receipts to show that a payment was made.

Source: FindLaw, " Alimony Guidelines: What Records to Keep Regarding Your Alimony," Accessed Oct. 2, 2015