In many cases, the answer is yes. There are several reasons why you might want to pay alimony in your New Jersey divorce aside from a sense of duty or a desire to be fair. For instance:
- Alimony is tax deductible to the person paying it and taxable as income to the person who is receiving it. Child support, on the other hand, is not deductible to the spouse paying it.
- Your spouse may agree to accept alimony and allow you to retain an asset which, if it were sold, would cause a large capital gains tax.
- If you have your assets tied up in a business, it may be better to pay alimony than it would be to get money out of the business to pay your spouse his/her share of the business.
When deciding on the best position for you, look at all of the tax consequences. Maybe paying alimony is the way to go.
Ann O’Flanagan is an attorney who handles family law exclusively in Flanders, New Jersey.