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Category: Adjustments

How can a divorce affect my income tax situation?

If you were recently divorced and are paying or receiving alimony under a divorce decree or agreement, you need to consider the tax implication for your 2013 federal income tax return.

Here are the general guidelines:

  • Alimony payments received from your spouse or former spouse are taxable to you in the year you receive them. Because no taxes are withheld from alimony payments, you may need to make estimated tax payments or increase the amount withheld from your paycheck.
    • If you are using TaxSlayer, you can enter the amount of alimony you received as income by selecting, from the Federal Section: Income Menu > Alimony Received.
  • Alimony payments you make under a divorce or separation instrument are deductible if certain requirements are met. Any payments not required by such a decree or agreement do not qualify as deductible alimony payments.
    • If you are using TaxSlayer, you can enter the amount of alimony you paid as income by selecting, from the Federal Section: Deductions > Adjustments > Alimony Paid.
  • Child support you pay is never deductible. Child support you receive is not taxable.
  • Furthermore, alimony does not include the following: non-cash property settlements, payments that are your spouse's part of community income, or use of the payer's property.

If you paid or received alimony you must use Form 1040. You cannot use Form 1040A or Form 1040EZ. When using TaxSlayer, we will automatically select the appropriate form to fit your specific return. If you received alimony, you must give the person who paid the alimony your social security number or you may have to pay a $50 penalty.

For more information, including rules for divorces and separations before 1985, get Publication 504, Divorced or Separated Individuals, available on the IRS Web site at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

To see other life events information that may have a significant tax impact click here.