Alimony and Taxes

alimony paid is a tax deduction


If you are divorced or separated your legal documents might have you either pay alimony to or receive alimony from your ex-spouse. When you receive alimony, you are required to report the income on your 1040, line 11 on the 2013 form. If you paid alimony, you are allowed to deduct it on your 1040, line 31a, even if you don’t itemize your deductions.

How does the IRS know when someone pays alimony and someone receives it? To get the adjustment for alimony paid you would need to list your ex’s social security number along side the amount. The IRS can then check the ex’s tax return to make sure he/she reported the income. If you don’t include your spouse’s social security number you can face a $50 penalty, and the IRS can disallow the deduction.

Make sure not to confuse alimony for child support. Child support is neither tax deductible to the payer nor taxable to the recipient.

There are more complicated issues around alimony, such as payments to third parties on behalf of an ex or payments for a jointly-owned home. If you are getting divorced, you need to consult a CPA regarding income tax planning issues.

Tweet it! Alimony paid is a tax deduction, but child support is not.  Consult a CPA when getting divorced. @BetteHochberger 

Florida Sales Tax Holiday August 2-4, 2013

tax free

tax-freeFlorida Sales Tax Holiday August 2-4, 2013

Even though we are still on summer break school is starting in just a few weeks. The weekend of August 2-4, 2013 is a sales tax holiday for Florida. This means that no Florida state or local sales tax will be collected on clothing, footwear, and certain accessories selling for $75 or less per item, on certain school supplies selling for $15 or less per item, and on computers and certain accessories selling for $750 or less per item. So getting ready for school can be a little cheaper! The Florida Department of Revenue has more information posted online on this Tax Information Publication and a list of eligible items you can get by scanning this QR Code with your smartphone.  Happy shopping!

Taxpayers Claiming Education Credits Wait Until February To File

With all of the changes to the tax code that were signed earlier this year the IRS is scrambling to catch up.  If you are a taxpayer that claims one of the education tax credits- the American Opportunities Credit and the Lifetime Learning Credit- using Form 8863 you will need to wait until mid February to file your return.  This is because the IRS needs time to test their systems and ensure proper computations.  Read more about it here.