Must Have Order To Deduct California Spousal Support Payments

Must Have Order To Deduct California Spousal Support Payments

Today, we’re talking about alimony and spousal support in California and specifically at the State of California Franchise Tax Board put out a publication talking about spousal support and alimony.

And we’re going over a lot of the questions getting this recorded on video so folks have a better understanding of how this works.

And we just shot a video and it was talking about what types of payments do not qualify as alimony.

I went through three or four things the Franchise Tax Board talked about here. And one of them was this that does not qualified as alimony.

Any voluntary payments made before they are written by a Divorce Decree or written agreement.

So right now we handle about 50 divorce cases a month. We do a high volume because we have affordable flat fees.

And we do really great services for folks taking care of the entire process for them from start to finish anywhere in California.

So we see a lot of scenarios of Divorce and what a lot of people do is they file for divorce.

They will move out or not maybe they’ll stay in the residence you know just for financial reasons but they are paying, they’ll do one of two things.

They either the one maintaining the status quo and continue to pay the bills and keep everything going as it was until they finally gets to the point where they divide up their property and come up with spousal support number if that’s the case.

Or let’s say one party moves out and let’s say the spouse that was working and let’s say the other spouse wasn’t they start giving a couple thousand dollars a month or whatever is appropriate in their case.

They start paying an amount to be considered as spousal support and child support.

Well, from what it says that would be considered as voluntary payment and it would not be qualified as alimony or spousal support in California.

And the reason that’s important to note is if you are paying money and there’s no court order and does not considered alimony it’s therefore not tax deductable.

And that’s one of the biggest things with alimony is you can deduct that from your taxes.

So if you paid $2,000 a month for alimony and you have a court order that says so then you can deduct those at the end of the year.

And your spouse receiving the spousal support would have to include that as income and they will be the ones paying the tax on that.

Now the way you can serve estimation this doesn’t, you’re not giving that tax advantage is as soon as you separate call us we can put together what’s called the Stipulation and Order.

So if you’re going to pay a thousand a month or whatever that number is, say, ‘Tim I’m paying a thousand a month.’

The divorce isn’t finalized which could take 6-8-12 months depending on how fast you move through the process.

You’re going to want to get some temporary orders immediately especially regarding alimony so you can get that tax advantage.

So you’re not just writing checks that you’re not going to be able to get any credit for. So this was right directly from the Franchise Tax Board.

We’re not tax advisers. We’re not giving tax advice or legal advice but I want to get this out there because this is how the franchise tax board and the tax treats alimony.

So get that court order as soon as possible so you could take advantage of it’ll be considered of those payments be considered as spousal support and alimony.

Tim Blankenship, we can put an order together for you as soon as 24 hours.

We also can handle your entire divorce case anywhere in California.