Once a couple has gotten divorced after reaching an agreement regarding child support and alimony, they are often unprepared for the tax implications associated with their divorce settlement. Paying and receiving different types of support has the potential to affect how your taxes are filed, along with your taxable income. Reputable and experienced accountants are able to help you file taxes after a divorce, but preparing yourself well in advance of filing by discussing how child support or alimony with your divorce attorney is always a good idea. The attorney who helped you establish your divorce agreement is able to provide you with the information needed to discover your child support and alimony tax implications.
Georgia law allows alimony (referred to as maintenance payments) to be awarded in certain circumstances. Usually only awarded after the dissolution of long-term marriages, alimony in Georgia is either “permanent alimony” or “rehabilitative alimony.” Permanent alimony is meant to help a spouse maintain their established standard of living after a long-term marriage, while rehabilitative alimony is designed to help a spouse get back on his or her feet after a divorce. The money paid to a former spouse as alimony is tax deductible and the spouse receiving it must claim the alimony as a source of income when filing taxes.
Child Support Income
Child support is the amount of money the non-custodial parent pays to help for the physical maintenance of any children. Georgia takes the income and expenses of both parents into account when establishing a child support amount. Unlike Alimony, child support does not need to be claimed on taxes as a source of income. The parent who is responsible for paying child support is not able to deduct those payments from his or her income meaning he or she is still responsible for paying taxes on that income.
Combining Support Payments
Non-custodial parents who are responsible for paying both child support and alimony may sometimes seek to combine their support payments. Paying alimony and child support together is easier for the non-custodial parent and allows the recipient a way to receive one or two large payments during the month instead of multiple smaller payments. Also, the spouse who is responsible for making payments is able to deduct the payments from taxable income as long as the child support payment is combined with the alimony payment.
Deciding How to Handle Support
Figuring out the best way to pay or receive support payments is stressful and one of the primary reasons that divorces become contested. People often have a hard time deciding what payment amounts or methods are reasonable. The best way to decide how to handle paying or receiving your support is to discuss your situation with a child support attorney. Conveniently operating in four different locations in Georgia, the attorneys at Vayman & Teitelbaum are able to help you decide how best to pay your support or receive it. Contact us today at 678-736-7700 to schedule a consultation to discuss your situation and your unique alimony or child support needs.