Divorce can be messy, both in terms of your relationships, and in terms of your taxes.
FOX Business’ Gerri Willis has your FOX News Radio Tax Tip:
Divorce and taxes, what you need to know.
I’m Gerri Willis with your FOX News Radio Tax Tip.
It’s bad enough going through a divorce, but if you fail to properly plan, you could create a tax nightmare. Key to getting it right is understanding the different ways the IRS treats alimony and child support says financial advisor Rich Coppa:
(Coppa) “The person paying alimony can get a deduction for the alimony. However, the person receiving alimony has to include it in income.”
And get this, to be deductible; you have to take alimony as a cash payment, not property. The rule changes when it comes to child support, there is no deduction attributable to a child support payment because in the eyes of the law, that’s a parent’s obligation. Likewise the receiving parent doesn’t have to report child support as income.
To avoid tax day surprises, lay out the details and any pre-divorce plan.
For more Tax Tips, go to FOXNewsRadio.com.
I’m Gerri Willis with the FOX Business Network.
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