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How the Court’s Ruling About the Tax Consequences of Your Alimony Can Alter the Size of the Award

calculatorAn old joke among law students and lawyers theorizes that students enter law school because they are not good at math. If they were, so the joke goes, they’d bypass law school in favor of medical school or engineering. The reality, however, is obviously very different. Many lawyers are very adept at math, which is important because many areas of the law, including family law, can involve extensive math skills. Many times, success in your alimony or child support case can involve having a Florida alimony attorney who has extensive knowledge of the rules and recognizes when the math “just doesn’t add up.”

One example of a case in which the alimony math “didn’t add up,” and the wife secured a favorable judgment on appeal as a result, was the divorce of Danny and Gina. The couple divorced after 14 years of marriage, and their divorce judgment required Danny to pay Gina durational alimony in the amount of $3,800 for eight years. Gina appealed the trial court’s order, contending that the amount of alimony the trial court awarded was too low. Specifically, the wife argued that the trial judge calculated the amount of alimony she should receive incorrectly because the judge failed to take into account the tax consequences of the alimony award.

The appeals court sided with the wife on this point. The evidence presented to the trial judge showed that the wife had a monthly financial need of just over $5,600 per month. Based on the wife’s work history, the trial judge imputed income to the wife in an amount just under $2,100 per month. Using these numbers, the court arrived at the $3,800 monthly obligation amount.

The judge also, however, declared that the alimony would be deductible by the husband and taxable as income received by the wife. This meant that the wife was facing a monthly tax obligation of almost $1,200 per month. That amount was not included in the wife’s statement of need. Thus, when the tax obligation was calculated, it actually resulted in the wife receiving a total income that was substantially less than her stated $5,630 need amount.

Florida law is clear that, if a supporting spouse has the financial ability to pay sufficient alimony to meet the recipient spouse’s financial needs, it is improper for a court to award the recipient spouse an amount of alimony that does not meet her needs. In this case, there was apparently no evidence that the husband lacked the financial ability to meet the wife’s declared amount of financial need. This meant that the alimony award should have been something that fully covered the amount that the wife asserted that she needed. In other words, the wife needed the court either to award her a larger amount of monthly alimony or to make a different finding regarding the tax consequences of the alimony she received.

Whether you are seeking alimony or child support, or stand to potentially pay alimony or child support, it is important to make sure that the outcome of your case “adds up” and yields a result consistent with what the law requires. The determined South Florida alimony attorneys at Sandy T. Fox, P.A. have helped spouses resolve alimony and other family law issues. Contact our attorneys online or by calling (800) 596-0579 to schedule your confidential consultation.

More blog posts:

Failure to Use Most Recent Salary Bonus Figure Leads Florida Appeals Court to Reverse Alimony, Child Support Calculations, Fort Lauderdale Divorce Lawyer Blog, Aug. 22, 2017

Regardless of Ability to Pay, Ex-Husband Allowed to Pursue Argument about Ex-Wife’s Need in Florida Alimony Dispute, Fort Lauderdale Divorce Lawyer Blog, July 6, 2016

Photo Credit: stevepb, [CC0 License], via Pixabay

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