Even without going through the divorce process many people are familiar with the concepts of child support and spousal support. Child support is payable by one parent to the other by and for the maintenance and care of a minor child. Spousal support is payable by one spouse to his or her spouse/former spouse for the maintenance and care of the spouse/former spouse. Family support is another, lesser known, support model utilized by San Diego family courts.
Family support is a combination of child support and spousal support. However, no individual amounts can be allocated for each type of support. If the court or parties designate particular amounts to be paid for child and spousal support, there is no family support order. Instead, there are two separate support orders.
Family support presents a unique tax option for parties. A spousal support payment may be tax deductible for the payor and taxed as income to the payee. On the other hand, child support payments are NOT tax deductible for the payor. Additionally, child support payments may not be designated as income to the payee because child support represents an obligation a parent has to care for his or her child. Thus, if the IRS were to tax the payee for the support paid, it would tax children. Even though it represents a hybrid of spousal and child support, entire amount of a family support payment may be tax deductible for the payor and taxed as income to the payee.
The tax status of family support is one way to formulate creative solutions for divorcing parties. The paying spouse may want the large tax deduction and prefer to pay a larger amount of support overall as long as the entire amount is deductible. The payee spouse may be willing to claim the entire support payment as taxable income because he or she is taxed at a low tax rate. This may create an overall tax savings for the parties.
At Bickford Blado & Botros, our attorneys can help you through the mediation and negotiation processes in order to come up with a mutually agreeable support solution for you and your spouse.
Please contact us if you are considering a divorce from your spouse, a legal separation, or have questions regarding child custody and visitation. Nancy J. Bickford is the only lawyer in San Diego County representing clients in divorces, who is a Certified Family Law Specialist (CFLS) and who is actively licensed as a Certified Public Accountant (CPA). Don't settle for less when determining your rights. Call 858-793-8884 in Del Mar, Carmel Valley, North County or San Diego.