If you are currently negotiating a divorce, and will be receiving alimony as a part of the arrangement, then there are some records you are going to want to keep on hand. Make sure to keep all of these records in an easily accessible but secure location so you don't find yourself in a legal scuffle later on. Alimony is the payment one divorced spouse grants to another as demanded by the court as a part of a divorce settlement.
Typically, a higher earning spouse who acted as the provider in a marriage may be required to pay alimony to another spouse who has not earned as much money or served as a homemaker and does not have a job. A lot of times the length of a marriage largely determines whether or not a spouse should pay alimony, as well as whether or not one spouse contributed a greater amount to the home than the other.
Alimony is tax-deductible and constitutes taxable income for the person that is receiving it. If you are paying or receiving alimony, then you need to keep adequate records for tax purposes. Spouses can often dispute alimony payments when a divorce is finalized, or the IRS may challenge the claims that amounts were actually paid and received. Whether you are an alimony recipient or a payer, you will want to keep details records to determine that you have not done anything wrong in regards to alimony payments. If you don't have the right documents you may lose the alimony tax deduction and be ordered to pay back support to your spouse in court.
As the payer, you should make sure to keep a detailed list showing when you made every payment. It is best to place the date, check number, and address to which the check was sent on this list so that the fact that you paid is indisputable. As well, you should make sure to keep the originals of every check that was used for a payment and make a note on each check determining which month the support is being paid for. If you decide to pay in cash instead of by check, then you should create receipts for every single payment that are signed by the recipient so you can determine that he or she received the money. You should keep these records for up to three years from the date that you file the tax return that deducts the payments. Some lawyers say that you should never throw away these records, even if they are from year ago.
If you are a recipient, there are also some records that you will want to keep organized and ready just in case a dispute arises. Make sure that you list the date every alimony payment was received and the mount received every single month in a ledger. Also, write down the check number or the number of the money order so that those checks can be traced. You can also write down the account number on which any check is written and the name of the back on which the check is drawn or the money order is issued, You should also photocopy all checks and money orders and copy all signed receipts that you give for cash payments.
While it may seem over the top to require all of these documents for each payment, this overcautious approach may be exactly what you need to avoid disputes and prove that you have either been paid what is necessary or have been jilted and deserve more money because your spouse has not been paying you as agreed upon. If you want more information about divorce records or are currently in the midst of an alimony dispute and want help, then you need to talk to an attorney at Cutter & Lax today. The San Fernando Divorce attorneys at this firm are ready to help you with any divorce situations that you are currently facing and can help to remind you of the documentation that you should keep on file.