Before you divorce it is mandatory that you first decide if you wish to pay Alimony to your spouse (in a U.S. state that doesn’t require it) or Child Support.  Alimony paid is tax deductible to the payer and taxed as income to the receiver.  Do not rule this kind of thinking out. 

In many cases when the man makes a much larger income than the spouse he is divorcing, it works out for both parties if Alimony is used as opposed to Child Support.  But do not pay both if you don’t have to!  Many times the tax deduction to be gained by paying Alimony allows you to pay the soon to be ex-wife more per month, to make up for her having to pay taxes on the Alimony received.  You may be saying,” I’m not paying that tramp more money per month!?”  But it many times works out that, due to the tax deduction, you end up with more money overall, and she with the same as she would have gotten via child care support only.  The only word of caution is that you must label Alimony as Alimony (to stop on a certain firm date), and it can’t be labeled as “for the care of children” or anything remotely like that.  It can’t be based on the children’s ages, or stated as such.  So make sure it looks like pure Alimony to the ex-wife and nothing else.

A lawyer or financial planner may be able to figure out which is better, Alimony or Child Support.  There is software out there to do it (one called Divorce Planner), but it is apparently costly!  Ask your lawyer if he/she can do this type of planning before you sign on with them!  This is your money at stake.

Tags: men coping with divorce, understanding divorced men

This entry was posted on Wednesday, May 7th, 2008 at 4:26 pm and is filed under Alimony. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.