Deciding what records to keep for alimony payments is up to the individuals involved. In general, alimony (or spousal support) refers to payments from one spouse to another following a divorce or separation.
Alimony is not a requirement of a divorce and it is up to the judge to determine whether alimony is needed on a case by case basis. The more modern trend is away from alimony orders, but courts still issue judgments for alimony after long marriages where one spouse earned significantly more than the other. Alimony is also ordered in divorces where one spouse left the workforce to care for children or take care of the household.
In most situations, alimony is tax deductible for the person paying the alimony and is classified as taxable income for the person receiving the alimony payments. This is why it's suggested that you keep records of all alimony payments made and received. It often happens that after a messy divorce, the spouses will challenge (or, in some situations, the IRS will look into) amounts that are paid and accepted as alimony.
If you don't have documentation that shows just how much was paid or accepted, the person paying alimony may end up losing the tax deduction for the alimony payment and could even be ordered to pay the other spouse any payments that were not documented.
Records to Keep for the Alimony Payer
In general, the person that is responsible for paying alimony should keep:
- A document that has a list showing when each payment was made. This information should include the check number, the address that the check was sent to, and (if your bank supplies it) a copy of the cashed check;
- Copies of each check that is used for alimony payment. Be sure the write in the memo portion of the check which month the alimony payment is supposed to cover; and
- Receipts for each alimony payment that is made by cash. Be sure that you have the other person sign each receipt that shows they received the alimony payment as well as the month that it was for.
As with all documents that you may need in case of a tax audit, you should keep all of these records for at least three years from the date you file a tax return on which you claim the alimony tax deduction. Some experts even go so far as to say that you should never throw away these records, as they can be used to show that you did indeed pay alimony should your ex-spouse ever decide to challenge you in court.
Records to Keep for the Alimony Receiver
The former spouse that is receiving the alimony payments should keep a detailed list that records each alimony payment that was received. For each payment, the recipient should include:
- The date that the payment was received;
- The amount of the payment that was received;
- The check number that the payment was issued from (or another piece of identifying information such as the money order number);
- The account number from which the check draws payment;
- The name of the bank from which the check draws payment (or the place where the money order was issued from);
- A copy of the check or money order that was used for payment; and
- A copy of any receipt that you signed in acceptance of a cash payment.
Just like the payer of alimony, the receiver of alimony should keep these records for at least three years in case the IRS comes knocking. In addition, if you feel that your former spouse has stopped making alimony payments, you can take your record to court with you to show where your ex stopped making payments and demand that future payments be made.
Get Legal Help to Better Understand What Records to Keep for Alimony
If you're facing alimony issues in your divorce case, there are a number of factors that the courts will consider in deciding whether and how it should be granted. An experienced divorce attorney can help you resolve these issues and will be able to give you further advice about keeping records for alimony.