Importance of proper documentation of alimony payments

In many Maryland divorces, one spouse is awarded alimony, even though it is not a requirement. What is required, though, is keeping proper documentation regarding this form of spousal support. Although most spouses detest having to pay alimony, one benefit is that it is tax-deductible. In a messy divorce, it’s not uncommon for one spouse to challenge amounts paid or received. Without proper documentation, the IRS or court could order additional alimony payments or cause the payer to lose his or her tax write-off. Read on to find out what records the payer should keep.

Each monthly payment should be thoroughly detailed in a spreadsheet or other document. It should include the amount, date paid, check number and the address the check was sent to. Include carbon copies of all checks used to pay alimony. If using cash, make sure to create a receipt and have the recipient sign it to confirm that he or she has received the amount for alimony payment.

It’s important to keep this information for at least several years. An ex-spouse can make a dispute at any time and by having detailed records, an alimony payer can present proof that he or she dutifully made the payments. Alimony recipients should keep the same documentation and also hold onto it for three years or more. When a recipient does not receive payment, he or she can take the payer to court and demand payment.

Although tracking alimony payments can seem like a hassle, it’ll be worth the time spent if a dispute were to ever arise. It may be a good idea for those paying and receiving alimony to discuss their rights and responsibilities with a qualified attorney.

Source: FindLaw, “Alimony Guidelines: What Records to Keep Regarding Your Alimony,” accessed Jan. 17, 2015