Divorce can be a complicated proposition. There are a lot of financial decisions that need to be made that can impact everyone involved. For example, if an ex-spouse is collecting alimony payments, there are certain tax implications for the former couple to consider. These payments can be tax-deductible for the spouse making the payments but claiming such deductions may be more complicated than it initially appears.

If payments are regarded as tax-deductible alimony, the ex-spouse receiving them must report them as taxable income on their tax return.

There are a number of mandatory requirements which must be met before payments to an ex-spouse can qualify, under the law, as tax-deductible alimony.

For example, the alimony payments have to be the result of an agreement based on a separation or divorce. Additionally, the alimony has to be paid directly to the ex-spouse or an approved third party. But all this has to be requested and set out in the divorce agreement.

Additionally, alimony payments have to be paid for the benefit of the ex-spouse. This is as opposed to child support, which are payments made to support any children from the marriage. In fact, alimony payments cannot be payments for anything else - only as financial support for an ex-spouse. The former couple also cannot live in the same home.

When all the requirements are met, the paying spouse can then claim the payment as tax-deductible alimony.

Figuring out the tax implications of spousal support is just one example of how complicated the divorce process can get. Even after the divorce is finalized, the former couple may still be trying to figure things out. Whenever divorce is being considered, the couple may find it beneficial to speak with someone who understands the process.

Source: Smart Money: "How to Deduct Alimony Payments on Your Taxes," Bill Bischoff, Sept. 28, 2011