Using a business account to make alimony payment can get difficult if you need to lower payment amounts.
Divorce is always difficult. Even finalized divorces often don’t completely sever ties between you and your spouse. When you have children together, you will be connected for the rest of your lives and probably have to cross paths even after your children are fully grown. Even without children, you may be tied to your ex-spouse through alimony payments.
Using a business account to make alimony payments could get tricky if you later want to lower the payment amount.
What Are Alimony Payments?
Some people confuse child support with alimony payments. However, the two are quite different, and even divorces that don’t involve children will often include alimony payments. Child support is about making sure your kids are taken care of, no matter with which parent they are staying. Alimony, on the other hand, is meant to offset the change of living circumstances for a dependent spouse after a marriage has been dissolved.
In many marriages, there is a wide discrepancy in income between the two spouses. The reasons for this vary, with a common one being a situation where the spouses have decided that one will stay at home and take care of the kids while the other works.
It would be unfair in a situation like this to expect the parent who stayed at home with the kids to immediately be able to support themselves. This is especially true during a long marriage where the stay at home parent has been out of the workforce for many years.
How Does it Work?
Alimony payments are made to the dependent spouse so that they can maintain a similar lifestyle to that which they enjoyed during the marriage. Alimony generally lasts up to half the length of a marriage. A dependent spouse married for eight years would be eligible for up to four years of alimony payments.
Alimony is discussed differently when a marriage has passed the ten-year mark. At this point, the marriage is considered long-term in most states. The exact number of years can vary from state to state, however. Once a marriage is viewed as long-term, there is no longer any limit on how long alimony payments may continue.
Alimony payments do not necessarily last as long as the optional term. There are several factors that may possibly lead to early termination of alimony payments depending on specific state laws, including:
- The dependent spouse cohabiting with another person
- The dependent spouse gets remarried
- The dependent spouse has an income increase
- The paying spouse has an income decrease
- The paying spouse retires
- Either spouse dies
Alimony isn’t meant as a prize for the dependent spouse. It is meant as a way to keep the balance. Divorce is a difficult enough thing to deal with on its own. Without the option of alimony payments, thousands of people every year could find themselves in a fairly desperate position after a divorce. They could be without any money and removed from the workforce for long enough that they have no realistic chance of finding gainful employment.
Paying From Your Business Account
When paying alimony from your business account, you need to consider the possible ramifications. Mixing business expenses and personal expenses can lead to many complications, including tax problems. If you face an audit from the IRS, you are going to need to properly account for your money and how it was spent and from where. If you have the money to pay from your personal account, it is far simpler to do so.
Should you be facing financial issues and want to lower your alimony payments as a result, if you have been making alimony payments from your business account, you are putting your account under the microscope, and your spouse’s lawyer will likely request to view your books. Since you are paying from your business account, this request will likely be granted. Any potential discrepancies found in your books could cost you.
Whenever possible, pay all of your personal expenses through your personal accounts and your business expenses through your business accounts. Keeping things simple is always best. However, if you feel that you must make your alimony payments through your business account, discuss the decision with your divorce attorney. That way, you can fully understand the possible consequences of doing so.