Tax Tip of the Week*

CHILD SUPPORT VERSUS ALIMONY

Alimony is usually tax deductible to the one making the payments and taxable to the one receiving them; whereas child support is neither deductible or taxable. There can be opportunities to play off one against the other, and benefit one or both parties. It is important that issue be recognized, and calculations done to determine what is best in your specific situation. Don’t forget that the classical tradeoffs are that alimony will often continue for quite a number of years, but will terminate upon remarriage or death; whereas child support will typically end at a specific time upon the reaching of majority by the child.