What do I need to know about Taxes and Maintenance / Spousal Support

Maintenance, or spousal support, has tax consequences. If you are paying it, it is deductable and has a tax advantage. If you are receiving it, it is treated like income by the IRS for tax purposes. That is the simple part. What confuses many people is knowing what the IRS considers to be maintenance. Here you have it:

  • Cash. This means real money changes hands. It does not mean that person A makes the car payment for person B's car
  • Written Order. Your document from court (most likely the divorce decree) will say order the maintenance. This differs from an informal arrangement where one spouse decides on their own to help the other one out (stranger things have happened)
  • Parties do not live in the same household. You got it, separate roofs required.
  • No joint tax return.
  • No part of it is child support. Watch out for "unallocated support"

It is vitally important that your divorce decree is correctly done, taking into consideration the above factors. This is reason number 5,459 that you should not be writing your own divorce but rather, leaving it to a divorce lawyer who is experienced. 

If you have questions about spousal support or any other aspect of divorce, make sure to get your hands on our free book written for Illinois consumers who are contemplating a divorce. This will give you general information. For advice specific to your situation, call O'Connor Cadiz law to schedule a confidential in office consultation in either Schaumburg or Itasca. 

Carol O'Connor Cadiz
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Attorney & Owner at O'Connor Cadiz Law: Bankruptcy, Injury, Real Estate & Mediation