When you’re going to be paid or going to pay alimony, there are records you should keep. Preparing for what you need now can help you avoid trouble later. These records are important for your own recordkeeping as well as for the courts and your taxes. Alimony is tax deductible for the person paying and needs to be reported by the person receiving it so that he or she can pay taxes on the sum.
If you don’t have the right documents, you could lose the right to claim tax deductions if you pay alimony. If you don’t report the right amount of alimony, you could be fined. Here are a few things that you should keep as a person paying or receiving alimony.
Paying alimony? Keep these items
It’s important to keep a list of the dates of each payment as well as information on your check number or deposit ID. Keep copies of the check used to make a payment if a check was used. Finally, get a receipt for any payment made in cash and have the other party sign it to show that he or she received it.
Receiving alimony? Keep these documents
You should keep information on the date you received alimony, the amount you received, the check number, the account number of the bank where the money was taken from and the name of the bank. Keep copies of the check or money order and copies of any handwritten receipts as well.
When you’re preparing for divorce, you need to know your financial status to help the courts decide if you need alimony or if you should pay it. Keep your budget on hand so your attorney can help you fight for what you think is fair.
Source: FindLaw, “Alimony Guidelines: What Records to Keep Regarding Your Alimony,” accessed Nov. 17, 2017