One of our favorite financial experts, Jeffrey B. Thomas, J.D./CIMA®/CDFA®, a Dallas-based Certified Private Wealth Advisor and Financial Advisor with Raymond James Financial Services, Inc., has provided us with a resource helping to determine when spousal maintenance is treated like child support.
This handy guide (available on the Collaborative Law Institute of Texas site for download) details the tax ramifications between the two. As he notes, “The IRS allows the parties considerable leeway when allocating funds from one spouse to another in terms of how much is maintenance and how much is child support. However there are certain rules which cannot be violated for the parties’ allocation and the corresponding tax treatment to be upheld.”
If you’re wondering what the Six Month Rule and the Multiple Reduction Rule are, and how those might impact you, we encourage you to download and review the information Thomas provided us.