Alimony can be a contentious part of divorce. There are many factors that determine how much alimony is paid and who it is paid to. Decisions are either made by the couple or by the court. Unlike child support, alimony is not mandated in most states, and the decisions regarding alimony are more likely to be decided on a case-by-case basis.
If you are entering divorce proceedings, you probably have many questions about alimony. Read more to find the answers to the questions burning in the back of your mind.
What is Alimony?
Alimony is “an allowance paid to a person by that person’s former spouse for maintenance.” Alimony payments will be decided by a court during legal separation, divorce proceedings, or while action is pending on the case.
This alimony definition is basic. When you dig into more information on alimony, it is clear that the issue is not so cut and dry as the definition states. Alimony is meant to remove worries of unfair economic burden in the event of a divorce. Payments of this nature are particularly meant to protect spouses who took time off work for any reason during the marriage, like to support family growth.
Each individual court proceeding regarding alimony is up to the court’s discretion. There are a few factors that are considered consistently. The age, physical condition, and emotional and financial states of spouses are the most prominent issues. The court also considers how long the spouse receiving child support would need to become self-sufficient, as well as the couple’s standard of living during marriage. The length of marriage and ability of the payer to support both individuals are also considered in decisions regarding alimony.
Among these factors, the chief concern of the court is to avoid excessively burdening either individual. The payer must not be required to pay an oppressive amount, and the recipient must not be forced into a significantly harder lifestyle.
Traditionally, payments were made from male partners to the female counterparts. As working trends have changed, decisions regarding alimony have changed too. Instead of being a guarantee in divorce proceedings, alimony is awarded in fewer cases than in the past.
How Long Do You Pay Alimony?
The length of alimony payments varies in each case, just like the amount paid. You can work with your ex-partner to decide how long payments will last, and how much will be paid. However, if you cannot agree, the amount and length of payments will be determined by the court. There are many options a court can choose from when setting the length of alimony payments
A judge can set an arbitrary date years in the future, in some cases. However, there are many other options for the court that are less vague. For example, if the recipient of alimony remarries, the payer will no longer have to pay alimony to them because they have entered into a new union in which the burden of separation is eased.
Sometimes the length of alimony payments is determined based on your children. If they no longer require a full-time parent, a judge may decide that alimony payments end at that point.
In the case that alimony payments extend to retirement (or any other major change in the payer’s income), the payer may request the court revisit the amount or length of alimony.
Additionally, if either the recipient or the payer dies, alimony payments will end abruptly.
Often, the length of alimony payments is determined by major life events. The options explored here include remarriage, children reaching adulthood, retirement, or death. A final option for judges is to set a period they consider reasonable for the recipient of alimony payments to make an effort to become self-supporting. In this case, payments may be lowered, or they could cease altogether.
Like the decision to award alimony payments, the length of alimony payments is decided on a case-by-case basis with many factors to consider. If you are making alimony payments, you do have the right to ask the court to revisit the decision it previously made.
Is Alimony Taxable?
As a general rule, alimony is taxable for the recipient and deductible for the payer, and it must be reported to the IRS. You do have the option, however, to decide that alimony payments will be nontaxable and nondeductible – given that this decision is mutually agreed upon and mutually beneficial.
If you are the recipient of alimony payments, there are steps you can take to include alimony payments in your taxable income. If you stay at home to care for children and alimony is your main source of income, you can make periodic payments to the IRS to avoid paying more at the end of the year. If you have other sources of income, you may ask your employer to withhold higher amounts to avoid the same outcome.
As the payer of alimony payments, you will want to talk with your lawyers. Ask them to help you ensure that the IRS will not view alimony payments as being linked to child support or as a substitute for other divorce fees (like lawyer or court fees). If your payments are seen this way, the IRS may contact you to sort out the problem.
The main takeaway here is that alimony is both taxable and deductible, depending on your situation.
Be Aware of Alimony During Divorce Proceedings
If you have more questions, feel free to ask your lawyer or seek more information. There are many resources to support those of us going through divorces. Make sure that you and your ex-partner are on the same page regarding alimony, and know what the likelihood is that you will pay or receive spousal support.