When the end of matrimony leads to the start of alimony, how does it affect your taxes? Alimony payments you receive are taxable to you in the year received.
The amount is reported on line 11 of Form 1040. You cannot use Form 1040A or Form 1040EZ. The person making the payment may claim a deduction in the year paid on Form 1040. You must give the person who paid the alimony your Social Security number or you may have to pay a $50 penalty.
If your decree or agreement calls for both alimony and child support and specifies amounts for each, only the alimony is taxable. Because no taxes are withheld from alimony payments, you may need to make estimated tax payments or increase the amount withheld from your paycheck.
For more information, see Publication 504, "Divorced or Separated Individuals." Publications and forms may be downloaded from the IRS Web site or by calling 1-800-829-3676.
This daily Tax Tip has been provided by the IRS