Every Massachusetts resident can benefit from an organized record-keeping system, and most people are well aware of this fact. When it comes to alimony payments, those who spousal benefits can benefit from should be keeping close track of any records relating to their payments too. These records will be very important to have on hand when dealing with year-end tax filings.
In the majority of cases, those who pay alimony can deduct those payments from their taxes. Meanwhile, those who receive the alimony must count it as taxable income. The reason this is particularly important for alimony payers is because an ex-spouse might not report the alimony payments received accurately. If the Internal Revenue Service notes a discrepancy in one spouse's report of what he or she paid and the other spouse's report of what he or she received, it could trigger an audit. You will definitely want to have the records on hand in the event of an audit.