Tax implications of separation and divorce


#1

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…


#2

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
Attorney with Rosen Law Firm

4101 Lake Boone Trail, Suite 500
Raleigh, North Carolina 27607
919.787.6668 main phone
919.787.6361 main fax

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Charlotte, NC 28262
Main Phone: (704)307.4600
Main Fax: (704) 9343.0044

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Chapel Hill, NC 27514
(919) 321.0780

ROSEN.COM

The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.


#3

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.

That doesn’t seem right to me.

What is the NC official stance on this?