The general rule is that alimony is tax deductible by the payor and includible as income to the payee. One exception to this rule is if you are paid alimony in a lump sum. If you are paid alimony in a lump sum payment, it means that rather than receiving alimony over a period of time, you receive one payment upfront. The benefit is that you do not have to worry about the payor not making the alimony payments or paying late, and you can budget the lump sum funds as you deem appropriate. If you receive alimony in a lump sum payment, remarriage or cohabitation, which is normally a triggering event to either terminate or modify alimony, is irrelevant and therefore, you can remarry or cohabitate without having to worry about losing your alimony award. Even though a lump sum alimony award is not tax deductible by the payor, usually, a lump sum award will be less than what the payee would have received if he/she was paid alimony over a period of time, in order to account for the benefit of the payee not having to pay taxes on said funds. I would consult with an experienced attorney in order to discuss the pros and cons of alimony being paid in a lump sum. *Disclaimer- Information in this blog post should not be considered or construed as tax advice. In order to obtain tax advice, please consult with a tax professional. [Posted by Lynda Picinic, Esq.]
Do I Have to Move Out After Being Served Divorce Papers in NJ?
To learn more about whether or not a spouse can force you to leave the family home after filing divorce papers, read on and give our skilled Morris County NJ divorce lawyers a call today. Is a spouse permitted to force the other spouse to move out of their home? In the state of New…
