Child Support versus Spousal Support

Support payments pursuant to divorce receive different tax treatment depending upon whether they are characterized as child support or spousal support (referred to also as maintenance or alimony). This is a potential tax planning opportunity, but there are important pitfalls that need to be addressed in the tax planning process. 

Payments classified as child support are not taxable to the payee spouse and not tax deductible by the payor spouse. Payments classified as spousal support are taxable to the payee spouse and tax deductible by the payor. These payments are not only tax deductible, but "above the line" adjustments to income, meaning that the payor spouse does not have to itemize deductions to get the tax break. In theory, divorcing spouses may be able to save money in taxes by taking advantage of this difference, but must be careful in how they do this. 

 

Andre Plessis, CDPP, RCS-D^TM REALTOR^®

As a RCS-D^TM REALTOR^® I assist individuals who are either thinking about divorce or are in the process of a divorce. To protect your rights NOW, you need a real estate agent specializing in divorce, an RCS-D^TM REALTOR^®

RCS-D^TM stands for Real Estate Collaborative Specialist-Divorce.

Tel: 310-266-9463 

Los Angeles Divorce Real Estate Specialist