FYI: My partner and I live in California, and my partner works for the federal government.
How exactly is spousal support deducted from the supporter's paycheck? Can he have it taken out before his paycheck is taxed so that his taxable income is reduced in that check, or does he have to pay the support after he has had tax deducted?
I lost my job right after my partner decided to divorce me, so I'm living on spousal support and unemployment compensation. He makes a six-figure income and agreed to pay me $3500 a month for half the length of the marriage. I thought we would be eligible to file our taxes jointly in the 2010 tax year, so I agreed to accept $2500 a month because I figured that he would have about $1000 withheld in taxes on that amount.
Well, that was back when I thought that our assets would be shared assets. I've just found out that we cannot file our taxes jointly next year after all. Now he says that when he files as a single person next year, he will declare his spousal support as nontaxable income, and I will have to pay tax on the support that I do receive. But this means he's keeping $12,000 a year that he agreed to pay out to me, money that was meant to be paid out in tax on the spousal support.
So I'm wondering if he can arrange to transfer the full amount, $3500, to me before tax is withheld. I know he can't afford to give me that amount after the tax is already withheld. Or should he reduce his withholding and then transfer the full amount??
BTW, I don't want to punish him, just get what the attorney said was fair and reasonable. (I only consulted an attorney once; I couldn't afford to retain him.) With my current medical expenses, the spousal support is not enough for me to live on. It's a good thing I'm getting unemployment checks, or I would be so screwed. But I really will be screwed next tax season if my ex keeps the $12,000 that was supposed to pay for the tax on this money. He doesn't see what the problem is. I've tried to explain, but I'm not getting through.
Anyway, I hope this makes sense. I feel like I'm really out of my depth here.