Alimony, also referred to as spousal support, is a court-ordered payment from one spouse to another while a divorce or legal separation is pending or after it is finalized in Texas. However, determining if an individual is entitled to it can be challenging. While divorce courts have been gravitating away from issuing alimony awards, they are still available in specific circumstances. Once an award is made, it makes good sense to keep accurate records of all payments.
Generally, alimony is considered tax deductible for the payer and taxable income for the receiver. After a contentious divorce, an ex spouse may challenge — or sometimes, the IRS may investigate — the payments for spousal support. If the appropriate documentation is not preserved, the individual who is paying could potentially lose his or her tax deduction.
It’s best to keep a detailed list showing when payments were made, along with check copies and receipts for all payments made in cash. The person receiving alimony should keep a detailed list documenting when each payment was received. This should include the date the payment was received, the amount, check number, account number and bank name. Receipts for cash payments should also be saved. All of these records should be kept for a minimum of three years for tax purposes.
If a dispute arises, these records may be brought to court to prove exactly when payments were made or missed. An experienced Texas divorce attorney can help protect important legal rights. Apart from enforcement proceedings for nonpayment of alimony, some circumstances may warrant a formal application to modify an existing court order. A lawyer can help an individual understand his or her rights and the legal options available.
Source: FindLaw, “Alimony Guidelines: What Records to Keep Regarding Your Alimony“, Accessed on Aug. 7, 2016