Maintain Records Of Your Alimony Payments Post-Divorce
Spousal support or alimony is payment by a spouse to another spouse after a divorce. Alimony is not always given by the courts. It is mostly given where the marriage was a long lasting one and income of one spouse is more than the other. It is also given where one spouse has been out of the workforce to manage the household or raise children.
Alimony is tax- deductible for the person who pays. Conversely it is a taxable income for the recipient spouse. It follows that it is very advisable to keep all records when you pay or receive the alimony. These can turn out to be extremely important. It is seen that spouses dispute post-divorce over the amount which is actually received or paid. If there is insufficient documentation, the payer may lose alimony tax deduction or can be pushed to pay back -support in-case the spouse wants to make a court claim.
Payer of the alimony
It follows that each party must keep a list which shows each payment. This must include the date, check number and the address to which that check was actually sent. Records must also be kept of all the check originals used for making payments. These must be kept in a secure place, like safe deposit boxes. Ensure that a note must be made on each check for every month when the support is paid. In case the support is being paid in cash, the payment receipts must be kept, and signed by recipient. These records must be kept for a minimum period of three years from date you have filed tax return which was deducted from the payments, but it is advisable to keep them as long as possible.
Recipient of the alimony
The spouse who receives the support must prepare a list which displays every payment received. Information like the date of received payment and the amount received should be carefully kept. Identifying information like the money order number or check number and the account number on which the check gets written must be preserved. Other important documents on the list include the bank name on which the money order is issued or check drawn must be documented. Photocopies of the money order or check and any copy of the signed receipt given for cash payments must also be filed away for future use.
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