The tax overhaul bill being reviewed in the nation's capital may eliminate a popular tax deduction. Section 1039 of the House bill, if approved, would take away the alimony deduction. While it may not generate substantial revenue, the proposed bill may have a large impact on taxpayers who pay spousal support and even its recipients.
Seeking a divorce decree that ensures financial stability involves more than obtaining dollar amounts or property. There are tax consequences associated with allocating alimony or child support for New Mexico couples.
Divorce does not escape taxes. Federal taxes apply to alimony and have financial implications. Any support paid to a spouse or former spouse under a divorce decree, separate maintenance decree or a separation agreement. The spouse paying spousal support may claim it as a deduction. The recipient must treat alimony as income and pay federal taxes on it.
Couples in New Mexico going through a divorce often have many disagreements, especially where money is involved. One often contentious issue that comes up when a couple in New Mexico goes through a divorce is that of spousal support, also known as alimony. Per New Mexico statutes, there are several types of alimony a court in New Mexico may award: rehabilitative, transitional and indefinite. Alimony may also be paid in a single sum, either all at once or in installments.
Sometimes, after years or even decades of being married, a couple in Albuquerque will decide their marriage can no longer last, and they are best off getting a divorce. For some long-term marriages, there is a significant income discrepancy between each spouse, with one spouse earning a great deal more than the other spouse. This is especially true if one spouse stayed out of the workforce to raise a family while married.
Usually when two spouses in New Mexico divorce, they do not want much to do with one another. However, one way that they will stay tethered to one another (whether they like it or not) is through alimony. While a spouse may be reluctant to pay alimony to their ex, it is often necessary for the receiving spouse to get back on their feet financially. Moreover, alimony payments need not continue indefinitely. Therefore, individuals who are getting a divorce may wonder how courts decide upon an appropriate amount of alimony.
The deadline for filing your income taxes is quickly looming. While some residents in Albuquerque may be daydreaming about what they're going to do with their anticipated tax refund, they should keep in mind that they must report all sources of income. The failure to do so could lead to tax problems down the road.
Getting everything you need at the end of the marriage can be difficult. Many disputes may surround the divorce process, and each spouse might find it difficult to part with certain things. Even if divorcing spouses can come to terms on who gets what, finances can still become a hot topic. During marriage, a couple may understand where their income is coming from and how their bills will get paid; however, post-divorce financial planning can be difficult for some spouses. If a spouse believes he or she will not be able to meet their financial needs following divorce, it is possible to seek alimony, also known as spousal support.
When a couple in New Mexico decides that they are going to move forward with a divorce, there are often countless legal issues to sort through. One issue, which is often one present in marriage, is the financial wellbeing of each spouse. In order to ensure that both spouses will be financially secure following dissolution, it may be necessary for one spouse to seek spousal support, also known as alimony. Spousal support is a way to help a lower earning spouse augment their finances.
Money can be a controlling factor in a marriage. Likewise, money is frequently the subject of many disputes during the divorce process. And when a spouse is concerned about his or her financial well-being post-divorce, it is likely that alimony will be requested. Spousal support payments are often received in monthly installments, but they could also be received in one or a few large lump sum payments.