The Tax Consequences of Alimony in Florida
Everywhere you look in Florida, there are reptiles that can kill you, such as the American alligator and, in certain parts of Miami-Dade County, also the American crocodile, plus others that are harmless but look plenty scary, such as the green iguana. Surprisingly, these do not make Floridians’ list of favorite subjects to complain about, and neither do the deadly thunderstorms and hurricanes that hit the Sunshine State almost every summer. They might complain about how these weather catastrophes affect the price of homeowners’ insurance, but that is only if they are wealthy enough to own a house, which most are not. Instead, Floridians take every opportunity to complain about taxes and alimony. The nature of your complaints will vary according to whether you are paying or receiving alimony; if the former, alimony is too much, and if the latter, it is not enough. If it is any consolation, tax laws change enough every year to keep tax preparers on their toes, and in Florida, divorce laws change quickly, too. If you feel like your ex-spouse and the IRS are conspiring to impoverish you, contact a Boca Raton alimony lawyer.
Not All Painful Expenses Are Tax Deductible
Florida’s current rules regarding the tax consequences of alimony orders went into effect at the beginning of 2019. Under the current law, alimony that you pay is not a tax-deductible expense. In other words, the court does not treat alimony expenses the way it treats the money you pay for your children’s daycare, in other words, a tax deduction for money you spend taking care of financially vulnerable members of your family. Instead, it treats it as a “paying for your mistakes” expense, like the credit card debt you have been trying to pay off for years. It makes you mad that you have to pay alimony because your ex decided to give up on your marriage, just like it makes you mad that every month, interest accrues on the credit card charge you made when you took your friends out to dinner at the Cheesecake Factory in 2005. You were the one who decided to marry your ex, just like you were the one who decided to show off by treating your friends to an expensive dinner; don’t expect the IRS to take pity on you for it.
Don’t Get Too Attached to Your Tax-Free Alimony Check
If you are the one receiving alimony, you will be pleased to find out that the money you receive as alimony does not count as taxable income, at least not for the time being. Florida lawmakers do not exactly have a soft spot in their hearts for people whose income is lower than that of their former spouse. Florida recently abolished permanent alimony and expanded the definition of “financially supportive relationship” so that your ex can stop paying alimony if you move in with your parents. Therefore, you should make the most of your tax-free alimony check while it lasts; live below your means and use it to pay down debt or deposit it in an interest-bearing account, because you never know when the rules will change again.
Contact Schwartz | White About Alimony and Taxes
A South Florida family law attorney can help you plan for the coming years in which you must pay alimony to your ex-spouse. Contact Schwartz | White in Boca Raton, Florida about your case.
Source:
hellodivorce.com/divorce-in-florida/who-pays-taxes-on-alimony#:~:text=After%20January%201%2C%202019&text=A%20person%20who%20pays%20alimony,they%20get%20as%20taxable%20income.
