Alimony, also known as spousal support, includes payments made by one spouse to the other for that spouse’s support following a divorce. Courts in South Carolina are not required to grant alimony in every case, they instead have the discretion to grant it under certain circumstances (which are discussed here).
Alimony payments are typically tax-deductible for the spouse making the payments and they are deemed taxable income for the spouse receiving the money. Given these tax implications, it’s critical for both parties to keep proper records of payments. A challenge by the Internal Revenue Service in the form of an audit or a fight with an angry ex are all occasions where having documentation of payments could be critically important. Without proper documentation, if the spouse receiving the money claims never to have received it, the spouse paying the support may lose the alimony deduction, held in contempt of court, or even be ordered to pay back spousal support by a judge.
The following is a list of documents that both parties, though especially the one responsible for making payments, should hang on to.
- A ledger listing the date of each payment, the check number, and the address to which the check was sent;
- A copy of each check used to give alimony to your spouse, noting which month the check is meant to cover; and
- If you pay in cash (which is definitely not advised), make sure that you get a receipt for each payment, signed and dated by the recipient, and keep each receipt for your records.
- In case of an audit, be sure to keep these records for at least three years from the date you file the tax returns deducting the payments.
Though it may seem excessive and unnecessarily complicated, the fact is that the headache of keeping track of your money is much less than the pain of having to prove to a judge or to the IRS after the fact that you actually made the payments. Though we hope our spouse would never make false claims, you can never be sure and it’s always better to be safe than sorry.
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