Difference between revisions of "Tax Implications of Support Payments"

Tax Implications of Support Payments (view source)

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 Support payments aren’t usually deductible if they’re paid to someone else. A spouse might, for example, pay a smaller amount of spousal support. But, they may make up the difference by covering the mortgage on the family home. Before agreeing to this kind of payment arrangement, it’s important to get the advice of a lawyer or accountant. You want to be sure that Canada Revenue Agency will treat the support payments in the way that works best for your financial situation.
-====Proving that the spousal support payments were actually paid====
-For spousal support payments to be taxable and deductible, the payments must be '''actually paid'''.
-Problems can come up when support is paid in cash. One spouse might say they made a payment while the other spouse denies receiving it.
-It’s a good idea to make support payments by cheque, electronic money transfer, bank draft, or money order. These are ways that prove you paid. If a payment is made in cash, it’s important to get a signed receipt from the spouse. It should clearly state the amount, the date, and the purpose of the payment.
-{| class="wikitable"
-|align="left"|'''Tip'''
-Keep a record of every spousal support payment. Keep copies of cancelled cheques or receipts of electronic money transfers. Make a note on each cheque or receipt what time period the payment covered.
-|}
 ====Proving that the spousal support payments were actually paid====