How much alimony can i write off

And recipients of alimony payments always had to report the payments as taxable income. This old-law treatment continues for alimony payments made under pre divorce agreements. But for payments made under post agreements, things will change dramatically. TCJA eliminates deductions for alimony payments required by post divorce agreements. For payments required under divorce or separation instruments that is executed after Dec. Recipients of affected alimony payments will no longer have to include them in taxable income.

This TCJA treatment of alimony payments will apply to payments that are required under divorce or separation instruments that are: 1 executed after Dec. For individuals who must pay alimony, this change can be expensive--because the tax savings from being able to deduct alimony payments can be substantial. No change in tax treatment for payments required by pre divorce agreements business as usual.

However, for these payments to qualify as deductible alimony, payers must still satisfy the time-honored list of specific tax-law requirements. That means the payer does not have to itemize to benefit from the deduction.

Payment recipients must include alimony payments that are required by divorce agreements executed before in their taxable income. So this is a continuation of business as usual. Amounts paid to a spouse or a former spouse under a divorce or separation instrument including a divorce decree, a separate maintenance decree, or a written separation agreement may be alimony or separate maintenance payments for federal tax purposes.

Certain alimony or separate maintenance payments are deductible by the payer spouse, and the recipient spouse must include it in income taxable alimony or separate maintenance. Note: You can't deduct alimony or separate maintenance payments made under a divorce or separation agreement 1 executed after , or 2 executed before but later modified if the modification expressly states the repeal of the deduction for alimony payments applies to the modification. Alimony and separate maintenance payments you receive under such an agreement are not included in your gross income.

Not all payments under a divorce or separation instrument are alimony or separate maintenance. In order to determine whether you can deduct—as Alimony Payer—or must report—as Alimony Payee or Recipient—alimony payments on your Tax Return, the year in which your divorce or separation agreement was finalized is the deciding factor. Visit the Alimony Payment and Taxes page for a detailed overview.

Please check your divorce or separation agreement for further details. Please use this easy, free and interactive tool to find out which divorced or separated parent can claim a child on an income tax return:.

You claim your child as a dependent on your tax return if the divorce decree or legal separation agreement names you as the custodial parent.

Otherwise, the child is your dependent if they lived with you for a longer period of time during the year than with your former spouse. However, if both you and your former spouse claim the same dependent, the IRS will apply tie-breaker rules to determine which former spouse qualifies to claim the child. Starting with Tax Year and ending with Tax Year tax return due in April , the dependency exemption for dependent children has been abolished.

As of now, the dependency tax exemption will be reintroduced for Tax Year The dependency exemption stopped with Tax Year , but it applies for and previous Tax Years for taxpayers who are filing back taxes. Only one parent can claim the dependency exemption. This is usually a straightforward decision if you have a divorce decree which names the custodial parent. If not, you are considered the custodial parent if your child lived with you for a longer period during the year than with your former spouse.

Sometimes the noncustodial parent can claim the exemption if the custodial parent signs a waiver pledging that he or she won't claim the child. Learn what education credits and deductions you qualify for and claim them on your tax return Get started. The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice.

Skip To Main Content. Here are the major federal taxation areas related to divorce. How the IRS defines alimony payments To qualify as alimony or separate maintenance, the payments you make to your former spouse must meet all six of these criteria: You don't file a joint tax return with your former spouse. You make payments in cash, by check, or by money order.

You make payments to or for a spouse or former spouse under an applicable divorce or legal separation agreement. Legally separated spouses cannot be part of the same household when making payments. Liability for the payment doesn't extend beyond the death of the spouse who receives payments. The payment is not child support or a property settlement.

Some divorce payments aren't considered alimony When the IRS defines alimony, it also specifically excludes certain payments as not qualifying for alimony or separate maintenance treatment. These include: Child support Non-cash property settlements Payments to keep up the property of the alimony payer Payments for the use of the alimony payer's property Voluntary payments not required under a divorce decree or separation agreement If a person paying alimony must also pay child support, but they do not fully complete the payment for both, payments would go toward child support first for tax purposes.

Arizona California Idaho Louisiana Nevada New Mexico Wisconsin Washington Texas Where to report alimony on your tax return If you have a divorce agreement finalized before January 1, , reporting alimony paid and received on your tax return is easy. If you're the person receiving alimony payments: You will enter the amount on line 2a.

On line 2b, you must input the date of the original divorce or separation agreement. If you're the person making alimony payments: You'll enter the amount paid on line 18a. Alimony payers are also required to input the recipient's Social Security number on line 18b, and the date of the original divorce or separation agreement on line 18c. Ways to reduce your taxes during a divorce If you're going through a divorce, planning the divorce separation agreement can help you save money on taxes in the future.

Claiming dependents Claiming a dependent on your tax return depends on many factors. These include: Head of household filing status Child and dependent care expenses credit Earned Income Tax Credit Health coverage tax credit Exclusion for dependent care benefits Choosing assets carefully Dividing assets during a divorce usually doesn't result in a taxable event: You don't usually have to pay taxes on gains or losses at the time of the divorce.