When the topic of divorce comes up it is usually followed by words like child support, custody and alimony. When a married couple decides to get a divorce the assets they once shared are normally divided up. In some cases a spouse may experience a sudden decrease in income that was previously shared. Alimony is called for when one spouse has less income than the other and they find themselves in need of financial support during the divorce or after. As defined by the Georgia State Bar, “Alimony is payment by one spouse to the other for support and maintenance.” The pay period of alimony is sometimes court ordered as temporary or permanent. Temporary alimony is awarded solely in the amount that is needed to keep living conditions as they are while the party’s go through the divorce. Permanent alimony is ordered after the divorce is finalized for long term support. Should the court set alimony, it commonly considers the standard of living that the divorce party had during the marriage and it tries to maintain this standard of living for the spouses if possible. Maintenance of a standard of living is more of a goal when it comes to alimony, than a guarantee. To determine the appropriate amount that is to be paid, the court examines the spouse’s gross income and curtails it by removing all mandatory deductions to obtain the net income. Mandatory deductions are considered as health care, federal and state income taxes, and social security.
Who makes the Decision on Alimony?
Some spouses can sometimes agree to the terms of the alimony of their own. If the party members cannot agree on alimony and one member is requesting it, then the court awards alimony according to the financial needs of the spouse. It is important to remember that there is no set equation in the sate of Georgia to determine the amount of alimony to be paid; the judge has extensive tact when ordering alimony. However, alimony typically isn’t offered for brief marriages or when the party members have close to the same amount of income.
How Much Do I Have to Pay?
If alimony is ordered to be paid, the payer will typically have to pay a specified amount each month until a date set by the judge, the former spouse remarries, the children no longer need a full-time parent at home, it is determined by a judge the former spouse has not made satisfactory effort at becoming partially self-supporting, convincing a judge to modify the amount paid, or one of you dies unless it was specified in the agreement that payment cease upon death, otherwise the payer will continue to pay the deceased spouse’s estate until the end date is met. It does not have to be paid to spouse directly, with approval, payments can be made on behalf of the spouse to the third party’s. It is good to note that alimony is barred if the reason for divorce is the requesting party’s adultery. Also important to remember is that spouses must keep paying alimony even if they have filed for bankruptcy. That even includes the payment of alimony that is past due.
How Will it Affect My Taxes?
Alimony is tax deductible to the payer and taxable to the recipient. It is important to remember that because no taxes are withheld from alimony payments, it is advisable increase the amount withheld from your paycheck and/or to make estimated tax payments. If it is not done you could end up owing the IRS when filing your tax return. When filing tax returns the only option is to file on the form 1040, where there is a space to state alimony received. An alimony recipient who refuses to give their ex-spouse their social security number could face a $50 tax penalty. Also, if the alimony payer knows the number but forgets to state it on the return, they could face a separate $50 penalty. Even worse, if the alimony recipient’s social security is not stated the IRS could rebuff, the deduction