You’ve been ordered to pay alimony. You may not be thrilled about it, even if you understand the reasoning behind the payments, but there is one upside: Those alimony payments are typically tax deductible — at least for another year. For your ex, taxes will need to be paid as if the alimony payments were traditional income, but you can write them off and save a bit on your taxes.
In order to make use of this system, it’s wise to keep careful records of the payments. Some things you need to record include:
- A receipt for any payment that you made in cash. Write down exactly how much was paid and then sign it. If you’re withdrawing the cash from your checking or savings account, keep the receipt from the bank. When you pay, have your ex sign the receipt as proof that you actually paid that total.
- A document listing out the date of each payment. If paying by check, you also want to write down the check number and the address you mailed the check to next to each date.
- Copies of the checks. Your checkbook may create copies automatically when you write out each check, so just make sure to store them with your records. The numbers, dates and check totals can then be matched against your other records to show exactly where the money went. Use the memo line to specify that the checks are for alimony.
Not only does this help you track your payments so you can write off the correct amount, but it makes it easy to prove if you get audited or if your ex claims you didn’t pay. Make sure you fully understand all of the legal and financial ramifications of your alimony order.
Source: FindLaw, “Alimony Guidelines: What Records to Keep Regarding Your Alimony,” accessed Jan. 25, 2018