Will receiving spousal support change my tax bracket?

Generally, spousal support is deductible by the payor ex-spouse and is included as income by the recipient ex-spouse. If you and your ex-spouse are in different tax brackets, the paying of spousal support could result in a net savings of tax payments, only, of course, if you consider both your ex-spouse’s and your income tax returns (which you may be unwilling to do). Your ex-spouse, for example, could save more in taxes by being able to deduct the spousal support than you would pay in taxes by including the spousal support in your income.

If your ex-spouse would receive a tax benefit through the spousal support – by liquidating some asset, for example – then this would be a factor in favor of paying spousal support. On the other hand, should he or she incur a tax liability through the spousal support, this would be a factor against paying spousal support, or in paying minimal spousal support.

As you might imagine, tax consequences of a spousal support award can become quite complicated. Do not try to do it alone here. A lawyer and accountant are the best professionals to advise you in the tax aspects of divorce.