What Is Unallocated Support and How Will It Change in 2019

The majority of divorcing couples understand the purpose of child support and spousal support. However, only few have heard of and are familiar with unallocated support. Unallocated support can benefit both parties and is an effective way to settle support issues in some divorce cases. Unallocated Support Defined An unallocated support payment combines child support and spousal support. It is a viable option when the spouse paying the support has a substantial income and the spouse receiving it has minimal to no income. Currently, the Internal Revenue Service or IRS allows the spouse paying this type of support to treat the entire amount as spousal support. This allows their entire payment to be tax-deductible because spousal support, not child support is tax deductible. In addition, the IRS requires the spouse receiving unallocated support to pay income taxes on the entire amount they receive. Since unallocated payments will give the payor the opportunity to save money on…

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