Alimony

AAA

DEFINITION of 'Alimony'

Payments made to a spouse or former spouse under a separation or divorce agreement. In the United States, each state sets its own laws on how alimony is awarded and paid. Whether alimony will be awarded and how much it will be is determined by factors such as the length of the marriage, the spouses' relative incomes and the spouses' financial prospects.

INVESTOPEDIA EXPLAINS 'Alimony'

For the receiver, payments are considered taxable income; for the payer, they are a deductible expense. Alimony should not be confused with child support. Alimony payments are specifically meant to support a spouse or former spouse, while child support payments are specifically intended to support one or more children from a dissolved relationship or marriage. Neither alimony nor child support payments may be discharged in bankruptcy.

RELATED TERMS
  1. Income

    Money that an individual or business receives in exchange for ...
  2. Alimony Payment

    A periodic pre-determined sum awarded to a spouse or former spouse ...
  3. IRS Publication 504

    A document published by the Internal Revenue Service that provides ...
  4. Legal Separation

    For all practical purposes, a circumstantial divorce without ...
  5. Child Support

    The monetary payments that are made from one ex-spouse to another ...
  6. Income Tax

    A tax that governments impose on financial income generated by ...
Related Articles
  1. Retirement

    Become A Certified Financial Divorce Analyst

    Use your financial knowledge to help people preserve their financial integrity after a failed marriage.
  2. Retirement

    Divorcing? The Right Way to Split Retirement Plans

    Mishandling how you define and allocate retirement-plan assets in a divorce can cost you plenty in taxes and aggravation. Here's how to do it right.
  3. Retirement

    Marriage, Divorce And The Dotted Line

    Does signing a prenuptial agreement put your marriage on shaky ground, or is it just smart planning?
  4. Budgeting

    Get Through Divorce With Your Finances Intact

    Find out how to split your finances without coming up short.
  5. Budgeting

    Kids Or Cash: The Modern Marriage Dilemma

    It now costs nearly $300,000 to raise a child for 18 years. Are you sure you're up for it?
  6. Budgeting

    Revealing The Hidden Costs Of Weddings

    Find out how to avoid paying more for your big day!
  7. Retirement

    5 Things To Consider Before Late-In-Life Marriage

    Waiting to marry has become the norm, but do you know what to consider before saying "I do"?
  8. Taxes

    What is the difference between gross income and earned income?

    Being able to distinguish between earned income and gross income is an important tool in preparing for and filing your individual tax returns each year.
  9. Taxes

    What is Value-Added Tax (VAT) and who pays it?

    Learn about the definition of value-added tax, the necessary circumstances that require a business to pay it and when a business is exempt.
  10. Savings

    I’m twice divorced –-can I still collect spousal benefits?

    Unsure if you’re eligible for spousal benefits if you’re divorced –more than once? Rob Kron from Blackrock gives a simple answer.

You May Also Like

Hot Definitions
  1. Multiplier Effect

    The expansion of a country's money supply that results from banks being able to lend. The size of the multiplier effect depends ...
  2. Command Economy

    A system where the government, rather than the free market, determines what goods should be produced, how much should be ...
  3. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  4. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  5. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  6. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
Trading Center