We have discussed the movement to reform alimony and spousal maintenance laws a few times here on this blog. It remains a hot topic, as advocates for such a change believe alimony laws are antiquated and don’t accurately reflect the current conditions of many American households. Specifically, both parties in a marriage usually hold jobs nowadays, whereas many years ago (the period these laws reflect, advocates say) only one party was employed.
Many divorcing Minnesota couples may agree with the advocates, while others may sit on the other side of the fence — but no matter your stance, if you are getting a divorce, reaching an agreement on alimony is a process you should not take lightly.
Some people assume that reaching an agreement is just a matter of time — an inevitability that will eventually work out. Of course, this is not the case. It is easy to try and put these issues on the backburner. Divorce is an emotional time, and it is natural to want to put potentially divisive issue out of your mind. Dealing with these issues though, especially alimony, can help you make it through divorce in better shape than you imagine.
One thing that divorcing couples can work into their agreement is making alimony payments tax deductable for the payer and taxable for the recipient. This has to be built into your divorce agreement because, according to tax laws, alimony is considered income unless noted otherwise. So if you are in line to make spousal support payment, make it explicitly clear in your divorce agreement that you are paying alimony and that it should be considered as such.
Source: Reuters, “Tax Planning for the divorcing and newly divorced,” Amy Feldman, May 4, 2012