Alimony payments are usually tax deductible for the person making the payments and are considered taxable income for the person receiving it, so it is extremely important to keep close, detailed records whether you are paying or receiving it. It is common for spouses to dispute the amounts of alimony that were paid, or for the Internal Revenue Service to challenge those payments.
If you do not have records of these payments, you could lose your deduction or forfeit some of the money you were paid.
The alimony payer
If you are paying alimony, you should have the following records in your files:
- Receipts for any payments you made in cash, signed by the alimony recipient
- A list detailing every payment you’ve made, including the date, check number and recipient address
- Originals for any checks you wrote for your payments, kept in a locked file or safe deposit box with the month of each payment written on them
In general, you should keep all this information for at least three years after you file your tax return on which you’ve deducted those payments.
The alimony recipient
If you are receiving alimony, you should have the following records in your files:
- The dates on which you received payments and the amount received
- Check numbers or other identifying information for all payments
- Names of banks on which the check or money order was drawn
- Account number for checks written
- Photocopies of checks or money orders
- Copies of signed receipts you make for payments received in cash
For more information and guidance on this and other issues related to alimony, speak with an experienced Minnesota divorce lawyer at Appelhof, Pfeifer & Hart, P.A.
