When paying or receiving alimony, keep detailed records


Last year, we wrote a post about alimony in the state of Nevada and how it can impact a high asset divorce. Today we're going to expand on that discussion by talking about the recordkeeping behaviors and actual physical records that you should maintain to ensure that your alimony is being handled properly and legally.

The first thing to note about alimony is that it has massive tax implications, regardless of whether you are the paying spouse or the receiving spouse. If you are the paying spouse, then your alimony payments can be used to reduce your taxable income. If you are the receiving spouse, then your alimony payments must be included in your taxable income.

Both spouses should keep the same records, but the process is slightly different for each. For example, the paying spouse should get a checkbook that makes carbon copies of the checks he or she writes. That way, he or she has all of the information and proof necessary for that payment. Now, if you pay in cash, you will have to create your own written receipt for the transaction. Make sure your ex-spouse signs the receipt.

The information and records you should keep are the identifying details. What bank does the check draw from? What is the check number? What was the amount of the payment? When was the payment made? What address was it sent to? If the payment was made in person, when and where did it occur? The answers to all of these questions provide valuable information to either spouse just in case legal action regarding your alimony should come up in the future.

Share To: