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Financial support obligations could impact income tax returns

In the course of a divorce it can be easy to lose sight of the big picture. Emotions that run high can make it difficult for people to see beyond the immediate future. This failure could have unintended consequences down the line for a variety of matters including financial issues such as alimony and-when the union involves children-child support.

Where spousal support is concerned, its award is generally dependent upon one of the spouses making more than the other. In situation such as these, the award can ensure the party who makes less does not experience a dramatic change in his or her standard of living. The amount, and how long it will last, depends on the specific situation.

Child support payments are a way of making sure both parents financially contribute to the upbringing of their children. There are a variety of factors that go into determining the amount including the number of children, the custody arrangement and the income of the noncustodial party.

While focusing on the amounts and how long alimony and child support will be paid is of course important when it comes to creating budgets, there are other ways in which these orders could have an impact such as where income taxes are concerned. This is because certain amounts paid, according to a settlement agreement, for either of these reasons, could be deducted by the payer when they are completing their income tax returns. Understanding this might have a bearing on payment determinations.

Because there is so much on the line when a couple divorces, it is vital to work with a lawyer who understands the potential ramifications and can help to keep you on track.

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