There are
several tax issues that arise in case of divorce. For example, alimony
(also called maintenance or spousal support) is a common audit issue.
The expense is tax deductible to the payer and taxable as income to the
recipient. Alimony has to be ordered by a court, or comes into effect
because of a legally binding agreement signed by both spouses.
If you
report alimony as income, you can deduct the portion of your
attorney’s fees paid to secure or collect that money. Fees paid to any
professional (attorneys, accountants, financial planners) for advice on
tax matters involving divorce are deductible on both sides.
