Alimony can be either taxable or deductible. Whichever category it falls into depends on how your divorce settlement was negotiated. Alimony payments that meet tax law tests may be deductible if you pay them, and they may be taxable if you receive them. On the other hand, an ex-couple can choose not to include alimony as either a deduction or as income for tax purposes. But both ex-spouses must agree. You can deduct the payments even if you claim the standard deduction rather than itemizing deductions. It's important to enter the Social Security number and last name of your ex-spouse; otherwise, your deduction may be disallowed, and the IRS may charge you a penalty. Also keep in mind, you cannot use Form 1040A (10-40-A) or Form 1040EZ (10-40 E-Z) to deduct alimony. If you receive taxable alimony, you also report the payments on Form 1040. Similarly, you must provide your ex-spouse's Social Security number. These notes are meant to be a general guide to federal income taxes. If you need specific advice, please consult a tax advisor or call the toll- free number for Federal Tax Information and Assistance at 1-800-829-1040.
