Spousal support or alimony is the monetary assistance that recognizes the contribution of a partner to the marriage as well as assists the recipient to get financial freedom. Although rules vary by state, an alimony is typically available for only those who were legally married. Any sort of spousal support obligation, which encompasses a provision showing termination after either party’s death or the recipient’s remarriage is typically presumed to be legally tax-deductible by the individual who gives the money. Additionally, such an obligation is also presumed to be the probable income by the spousal support’s recipient.
However, any individual receiving or paying spousal support amount must confer and consult with a well-versed Virginia alimony attorney having an in-depth understanding of taxes in divorce cases, as well as a tax expert or an accountant to make sure they comprehensively know and understand the tax consequences of spousal support in Virginia both in now as well as in the future.
How to Qualify
For the reasons of spousal support, being taxable income by the payee and tax-deductible by the payer, the spousal support has to be payable between the two parties living separate. Additionally, the payments typically should be directly made from the person responsible for spousal support to the payee in full cash. However, payments can also be made, in some circumstances, on behalf of the recipient just for certain needs and necessities like a mortgage payment. You need to know that the payments have to be pursuant to legally written divorce order or separation agreement.
Taxes and Spousal Support
When it comes to tax consequences of spousal support, there is a general presumption of the support payment and taxes in the Commonwealth of Virginia that the spouses paying get to lawfully deduct the support payment on their taxes. On the other hand, the spouse receiving the support payment should add it to their gross income. For instance, when an individual in need of alimony is negotiating the support obligation, they must assess how much monetary amount they really require in order to meet their at least basic needs and fulfill their monthly expenses. It is imperative to recognize and appreciate that the eventual gross amount of the support payments is not likely to be the full final actual amount which they obtain in order to keep as the tax consequences of spousal support rules.
Most often, spousal support payments are tax-deductible for the spouse who make the payments. On the other hand, the support payments are fully taxable in the state of Virginia to the individual who is obtaining the payment.
Whether you are a divorcing spouse who has is likely to make spousal support payments or the party who is asking for consistently alimony payments, it is imperative for you to approach a family lawyer to help you minimize the support payments or get the maximum amount respectively. In addition, it is wise to approach a tax consultant or finance advisor to get expert advice on your specific alimony matter for tax consequences of spousal support on your gross income.