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 FAQS
  1. Is progressive tax the same thing as marginal tax rate?

    A marginal tax rate is a form of a progressive tax. Any progressive tax is a tax created based on the amount of income an ... Read Full Answer >>
  2. What are the pros and cons of a progressive tax policy and who benefits the most ...

    Those who oppose a progressive tax hierarchy are likely to be those who pay more taxes when such a policy is in place. A ... Read Full Answer >>
  3. Do all taxes create deadweight loss?

    Taxes create deadweight loss because they prevent people from buying a product that costs more after taxing than it would ... Read Full Answer >>
  4. What's the difference between regressive and progressive taxes?

    The U.S. federal tax system and local and state tax systems are complex in that they combine progressive, regressive and ... Read Full Answer >>
  5. How is compound interest taxed?

    Compound interest is money that is earned and added to a principal balance and then earns additional interest. Adding interest ... Read Full Answer >>
  6. Is the marginal tax rate a progressive tax?

    The marginal tax rate is a type of progressive tax system that imposes a higher income tax rate on people with higher incomes, ... Read Full Answer >>
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

    OK, So I'll Be Smarter Next Tax Time

    5 tax resolutions to start on right now for a smoother tax return next April 15.
  9. Taxes

    What To Do If You Lost Your W-2

    There's no need to panic if you don't have your Form W-2 to file taxes, there are easy ways to gain access to the missing form or file without it.
  10. Taxes

    Will Itemized Deductions Get You A Bigger Refund?

    April and taxes are due soon. If you need to file your return, you might have to decide if itemizing your deductions this year will net you a better deal.

You May Also Like

Hot Definitions
  1. Geometric Mean

    The average of a set of products, the calculation of which is commonly used to determine the performance results of an investment ...
  2. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  3. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  4. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  5. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  6. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
Trading Center