Keep detailed records when alimony is agreed

A couple of months ago, we wrote a post about alimony and how this critical form of financial support is determined. Today, we want to continue that conversation by talking about the recordkeeping practices that a spouse should follow after they have been awarded alimony or have been given the responsibility of paying alimony.

Alimony is a delicate matter, just as anything that involves money will be. As such, it is important for the spouses involved in an alimony agreement to track these payments so that if litigation occurs in the future, you will have detailed records and information to supply the courts. In addition, alimony has massive tax implications for both individuals involved. The paying spouse can deduct the alimony from his or her taxes, while the receiving spouse must include it in his or her taxable income.

Both spouses should take proactive and immediate steps every time a payment between them is exchanged. Write down the amount that was paid, the date it was paid, and the address it was sent from and to. You should also take note of the check number, the bank used, and the account number that the check draws from. If you are the paying spouse, having a check book that makes carbon copies is critical.

Additionally, if the paying spouse does not use checks to make his or her payments, then it is your responsibility to create a paper receipt that is signed by both parties, thus denoting the transaction took place.

Source: FindLaw, “Alimony Guidelines: What Records to Keep Regarding Your Alimony,” Accessed Aug. 15, 2017