4. Deducting alimony paid to former tax spouse

The money paid to a spouse or person as per certain agreement is called alimony. The agreement can be a separation agreement or divorce agreement. These agreements are usually made with those people from whom you separate from rest of your life. It does not involve any kind of property settlement amounts. The alimony must be included in the gross taxable income. It is applicable for you as well as for your spouse also. The rules regarding the taxation in the alimony category changes at different times. Also in case any voluntary payment is made, no tax benefits will be given. In case of alimony, the payment should be made under an agreement. But one has to check for the payment limits that favours the tax deduction benefits. After this agreement you and your former spouse must not live in the same apartment. The payment liability to the spouse must be terminated on the death of the spouse. Also, if the former spouse received any taxable alimony from you then, he/she should report it. Also while making the agreement between you and your spouse make sure that you mention about the alimony which is not tax deductible for you and also for the spouse.