3 Hidden Costs of Alimony
If you are in the process of getting a divorce, or if you think divorce might be on the horizon for you in the near future, you might also be coming to terms with the impact this development could have on your future finances. Perhaps your spouse has a much higher income than you do, or perhaps you are a stay-at-home parent or homemaker with no current income of your own at all. Maybe you’re thinking of asking for alimony and are wondering if the payments will really make up for the household income you will lose through divorce.
Even if you’re pretty sure that your soon-to-be-ex can afford to pay you a decent amount of spousal support, there are some potential costs to consider when trying to calculate exactly how much you will need:
You will have to pay taxes on any alimony you receive.
The sting of alimony payments is assuaged for the payer by a tax deduction. For the recipient, alimony is taxed as normal income. This means that when you calculate how much money alimony will provide toward your after-divorce living expenses, you need to deduct your taxes first. If you need help calculating your projected after-tax income, an accountant or financial advisor can help.
It could reduce the amount of child support you receive
If you have children and will be calculating child support payments, then you need to know that on both the New Jersey Shared Parenting Child Support Worksheet and the New Jersey Sole Parenting Child Support Worksheet, alimony payments are included as income for the recipient and are deducted from the payer’s income. To find out how much of a difference your potential alimony payments will make, run your child support calculations both with the potential payments and without them.
It might cost you money in court to try to receive alimony
If your spouse agrees with you that you are entitled to alimony and also agrees with you about the appropriate amount, then you are in the lucky minority. If you have a relatively minor disagreement about alimony, you may be able to settle the matter quickly and inexpensively with the help of a mediator. But what if you and your spouse are miles apart on this issue?
If you have been married for a significant length of time and have a much lower income than your spouse, and yet your spouse is still objecting to paying alimony, or is objecting to paying anything close to the amount of alimony your attorney has indicated that you have a right to receive, then filing a spousal support claim in court is likely to be cost-effective in spite of the red tape and aggravation it may entail. You may even be able to get your ex to pay for some or all of your attorney fees and court costs.
On the other hand, if you have only been married a short time, if the difference between your income and your spouse’s income is marginal, or—especially—if your attorney is advising you to give up or settle your spousal support claim, then you need to proceed with caution. Alimony battles in court can be bitter, protracted, and expensive. In some cases they accomplish little more than depleting the amount of money available for a couple to divide or to spend on children.
Determining an appropriate amount and duration of an alimony award is rarely simple. Unlike child support, which is calculated according to a very clear formula, spousal support can be calculated only by weighing a number of different alimony factors, which are often subject to different interpretations. If you have a significant alimony dispute, then obtaining attorney assistance is imperative.
Not sure if you have a legitimate alimony claim, or not sure how much alimony you should receive? One of our experienced family law attorneys at Weinberger Divorce & Family Law Group, LLC can help. Contact us today for an initial consultation regarding how the New Jersey alimony factors would apply in your case.
