Alimony expenses can be accounted for within client plans using Alimony Expense cards. These can be entered into RightCapital within the Expenses section of the Profile (or the Expenses step of the initial data entry process), by clicking Add Expense > Alimony:
Alimony Expense Data Entry
Click on this card to open a data entry drawer on the right side of your screen, allowing you to input the details:
Owner - the individual for whom this alimony expense is for.
Expense starts - The start year is the first year the expense is included in the plan.
Expense ends - The end year is the final year the expense is included in the plan.
Annual increase - indicates the percentage increase that will be reflected each year. You can choose 'Customized inflation' to enter a specific percentage.
Divorce date - specify whether the divorce occurred before or after 1/1/2019:
- For divorces prior to 1/1/2019, expenses are tax deductible (Line 19a of the Schedule 1, Line 10 of the 1040).
For divorces on or after 1/1/2019, there is no deduction for alimony expenses.
Additional Information
Alimony Expense Taxation
Alimony expenses will have different tax implications depending on the Divorce date that you choose:
- For divorces prior to 1/1/2019, expenses are tax deductible (Line 19a of the Schedule 1, Line 10 of the 1040).
For divorces on or after 1/1/2019, there is no deduction for alimony expenses.
Sample tax forms can be viewed in the Tax > Tax Estimate > Details tab:
Alimony Expense Cash Flows Location
Alimony expenses can be tracked within the Retirement > Cash Flows > Summary page, by clicking into the Expenses > Other Expense > All Other Expenses column:
