Monday, August 11, 2008

Alimony Payments

Did you know that you can deduct mortgage payments and other household costs paid on a home owned by your former spouse post a divorce or separation?

You can deduct payments you make in cash to your spouse or former spouse under a divorce or separation agreement if those payments meet the definition of alimony, aligned with the tax law. The deduction is allowed as an adjustment in figuring your adjusted gross income; therefore it reduces your taxable income, whether you itemize or not.
Alimony includes payments made both directly to your spouse or former spouse and even to a third party on behalf of your current or former spouse. However, your current or former spouse will have to include these alimony payments in income.

If you have any questions pertaining to taxes and in accordance to divorce and separation, contact a professional tax consultant who can serve you on even the smallest nuances that the average taxpayer may not know.

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