Alabama residents who are considering divorce may want to be aware of a pitfall relating to tax deductions. The U.S. Tax Court recently denied a man's alimony payments that were deducted in 2008. Although his divorce decree stated that the alimony could be deducted and that his wife should report the received payments as income on her tax returns, the termination contingency on the divorce decree invalidated that stipulation.
Although many people might not know exactly what to expect when deciding to file for divorce, it will certainly provide lifestyle adjustments. Of course, couples can work together to ease that transition for themselves and any children involved in the split.
For quite some time, alimony has been included in divorce settlement as a means to help balance some financial inequities in the wake of divorce. If one spouse earns significantly more than the other, the one who has the higher income may be required to make monthly payments indefinitely.