1st off, i am NOT an attorney. I can answer this question partly however.
Alimony is treated as income by the recipient and is therefore taxable income. You can also claim this in your taxes when you file as a deduction. As far as her lawyer wanting 27% more, maybe that is fair, I don’t know your specifics regarding your income, her income, length of marriage, possible marital fault etc. To me, agree to what is fair upfront and she pays the taxes and you get the credit on whatever you pay. Do you have an attorney in this matter? If you don’t, get one or you may live to regret it. Fight for your rights…
Alimony as ordered by the court is an amount to be paid to the dependent spouse from the supporting spouse. This amount is included in the income of the dependent spouse and deducted from the income of the supporting spouse.
However, it does not have to be the way I described above. The two of you are free to agree that the supporting spouse will pay the taxes on the alimony and it will not be included in the income of the dependent spouse.
It sounds like your spouse is trying to get a specific amount of money after taxes. That may be the reason why your Wife’s attorney has drafted the agreement in this way.
Helena M. Nevicosi
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My wife and I are stuck on one part of the separation agreement which seems to be one of us misunderstanding the tax implications.
What is the official tax implications of paying alimony?
I deduct it and she has to claim it as income therefore pay taxes on it?
Her attorney has put a provision in the agreement that if I choose to deduct the amount paid in alimony, I either have to pay her 27% of the deducted amount in april, or pay 27% additional of the monthly alimony cost.