Is Alimony Payment Tax Deductible

The general answer is yes but there are complications. Here is one of them.

Today a client asked if his Alimony (Spousal Support in California) payment was tax deductible for 2011 even if he is still technically married for tax purposes.

The answer is YES…..BUT.

Tax filing status is determined by marital status on December 31st of a given year so if he was still married on December 31st he generally (there are limited exceptions where it may be possible to claim Head of Household status) must file either Married Jointly or Married Separate. In order to deduct the alimony payments they must choose Married Separately. If the couple, now separated but not yet divorced, AGREE to both file Married Separately the alimony will be deductible to the payer and taxable to the payee. The BUT comes into play when you consider all of the other side effects of the Married Separate filing status. Consult your tax preparer for full details.