Depending upon your family’s situation as well as the length of the marriage and your earning potential you might either be paying or receiving child support, maintenance or family support. Whether you are receiving or paying it is important to know the difference as well as the implications of the three.
Child support is paid to a spouse to help cover the added costs that children bring to a house. In situations of equal placement, the person with the higher income may pay child support to the other. In other situations, the person who has the children more often than the other will receive child support from the other parent. How much child support depends upon how much placement each has as well as how much each person earns. Also, it depends upon the number of children. The significance of child support is that it is not taxable income so it is tax free money. This also means that if you are paying child support it cannot be deducted on your income tax returns.
Maintenance is what we used to call alimony. This is for support of the spouse and is generally awarded to be paid by somebody with substantially higher income than the other in long-term marriages in most cases. The amount and length of maintenance depends upon a number of factors including the disparity of income, the education of both parties, the financial needs of both as well as their earnings or earning capacity of each. Maintenance is taxable income so if you are receiving maintenance you will have to pay tax on it. If you are paying maintenance it is a deduction on your income tax returns.
Family support is a combination of both child support and maintenance. In some situations, all of what you are receiving could be considered taxable income and all of it may be deductible to the payer. On the other hand, sometimes, depending upon each person’s tax bracket and cash flow needs, a portion of it would be considered child support and the other portion maintenance and treated as discussed above. One primary issue with family support is that how long family support lasts and how it terminates can impact how it is treated by the taxing authorities. That is why it is important to seek the services of an experienced divorce attorney to make sure that whether you are paying or receiving family support it is done in such a way that you do not have tax problems in the future.
Sometimes, a divorce will include periods of time when one person is receiving or paying child support, maintenance and family support. If you are the person responsible for paying any of these three it is important to make sure that it is done in such a way to be the most financially advantageous to you. Also, there are a number of factors that an experienced divorce attorney can address with you to limit your exposure. On the other hand, if you are receiving these payments it is extremely important to maximize what you are receiving as well as doing so in an advantageous manner for you and your children.
Questions regarding child support, maintenance and family support are just some of the issues the family law attorneys at Krueger Hernandez & Thompson SC address on a daily basis. If you have any questions about your divorce, whether support or maintenance, contact the firm for a no cost, no obligation consultation. At Krueger Hernandez & Thompson SC children come first as well as taking care of the needs of their parents so that all can have a prosperous future. In the Madison area call (608) 824-8540, the Baraboo area call (608) 356-3961 or statewide call (866) 455-2993. Please feel free to check out our website at https://khtlawyers.com for more information.