# Here's some financial advice if you're paying alimony as a lump sum.



## CAviaGA (Oct 7, 2013)

Divorced last year. Final last November. We were able to finalize things in mediation and I opted to pay a one-time cash settlement to cover spousal support. I borrowed the money ($170k) from my father. I thought it would be best to just have it over and done with and never have to contact her for any reason ever again.

You can claim alimony/ spousal support paid on your tax return. I get to write it off and she has to claim it as income. I am self employed and use an accountant to do my taxes. Despite the $170k write off, I still owe almost $12k in taxes for my self employment (social security, medicare). The spousal support I paid is only a deduction on my income tax. So, the $170k put my income at ZERO (actually around negative $90k) for the year after all of my other deductions. So, I don't pay any income tax but I still pay my social security and medicare. This $170k deduction saved me only around $10k in taxes. The IRS got most of the money from me and they'll now go after her for a huge hit on the $170k. 

The better solution, if you can do it, is to space out the lump sum payments over 2 or 3 years. That way you can receive the full benefit of a write off each of those years since there is no carry over to the next year. By claiming it all in 2013, I wasted about $90k that could've been written off.


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