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Tax Effect of Alimony

Typically, both your and your spouse's "taxable" payments will be larger than the non-tax payments.

Here's why:

The recipient has to receive more each month to compensate for the tax he or she pays on the alimony income.

The payer can pay more each month because of the benefit of the tax deduction he or she gets.

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Last Update Dec 22, 2008
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