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2006 Utah State Tax Return

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2006 Utah State Tax Return

2006 utah state tax return 6. 2006 utah state tax return   Tip Income Table of Contents Introduction Useful Items - You may want to see: Keeping a Daily Tip RecordElectronic tip record. 2006 utah state tax return Reporting Tips to Your EmployerElectronic tip statement. 2006 utah state tax return Final report. 2006 utah state tax return Reporting Tips on Your Tax Return Allocated Tips Introduction This chapter is for employees who receive tips. 2006 utah state tax return All tips you receive are income and are subject to federal income tax. 2006 utah state tax return You must include in gross income all tips you receive directly, charged tips paid to you by your employer, and your share of any tips you receive under a tip-splitting or tip-pooling arrangement. 2006 utah state tax return The value of noncash tips, such as tickets, passes, or other items of value, is also income and subject to tax. 2006 utah state tax return Reporting your tip income correctly is not difficult. 2006 utah state tax return You must do three things. 2006 utah state tax return Keep a daily tip record. 2006 utah state tax return Report tips to your employer. 2006 utah state tax return Report all your tips on your income tax return. 2006 utah state tax return  This chapter will explain these three things and show you what to do on your tax return if you have not done the first two. 2006 utah state tax return This chapter will also show you how to treat allocated tips. 2006 utah state tax return For information on special tip programs and agreements, see Publication 531. 2006 utah state tax return Useful Items - You may want to see: Publication 531 Reporting Tip Income 1244 Employee's Daily Record of Tips and Report to Employer Form (and Instructions) 4137 Social Security and Medicare Tax on Unreported Tip Income 4070 Employee's Report of Tips to Employer Keeping a Daily Tip Record Why keep a daily tip record. 2006 utah state tax return   You must keep a daily tip record so you can: Report your tips accurately to your employer, Report your tips accurately on your tax return, and Prove your tip income if your return is ever questioned. 2006 utah state tax return How to keep a daily tip record. 2006 utah state tax return   There are two ways to keep a daily tip record. 2006 utah state tax return You can either: Write information about your tips in a tip diary, or Keep copies of documents that show your tips, such as restaurant bills and credit or debit card charge slips. 2006 utah state tax return You should keep your daily tip record with your tax or other personal records. 2006 utah state tax return You must keep your records for as long as they are important for administration of the federal tax law. 2006 utah state tax return For information on how long to keep records, see How long to keep records in chapter 1. 2006 utah state tax return    If you keep a tip diary, you can use Form 4070A, Employee's Daily Record of Tips. 2006 utah state tax return To get Form 4070A, ask the Internal Revenue Service (IRS) or your employer for Publication 1244. 2006 utah state tax return Also, Publication 1244 is available online at www. 2006 utah state tax return irs. 2006 utah state tax return gov/pub/irs-pdf/p1244. 2006 utah state tax return pdf. 2006 utah state tax return Publication 1244 includes a 1-year supply of Form 4070A. 2006 utah state tax return Each day, write in the information asked for on the form. 2006 utah state tax return   In addition to the information asked for on Form 4070A, you also need to keep a record of the date and value of any noncash tips you get, such as tickets, passes, or other items of value. 2006 utah state tax return Although you do not report these tips to your employer, you must report them on your tax return. 2006 utah state tax return   If you do not use Form 4070A, start your records by writing your name, your employer's name, and the name of the business (if it is different from your employer's name). 2006 utah state tax return Then, each workday, write the date and the following information. 2006 utah state tax return Cash tips you get directly from customers or from other employees. 2006 utah state tax return Tips from credit and debit card charge customers that your employer pays you. 2006 utah state tax return The value of any noncash tips you get, such as tickets, passes, or other items of value. 2006 utah state tax return The amount of tips you paid out to other employees through tip pools or tip splitting, or other arrangements, and the names of the employees to whom you paid the tips. 2006 utah state tax return Electronic tip record. 2006 utah state tax return   You can use an electronic system provided by your employer to record your daily tips. 2006 utah state tax return If you do, you must receive and keep a paper copy of this record. 2006 utah state tax return Service charges. 2006 utah state tax return    Do not write in your tip diary the amount of any service charge that your employer adds to a customer's bill and then pays to you and treats as wages. 2006 utah state tax return This is part of your wages, not a tip. 2006 utah state tax return See examples below. 2006 utah state tax return Example 1. 2006 utah state tax return Good Food Restaurant adds an 18% charge to the bill for parties of 6 or more customers. 2006 utah state tax return Jane’s bill for food and beverages for her party of 8 includes an amount on the tip line equal to 18% of the charges for food and beverages, and the total includes this amount. 2006 utah state tax return Because Jane did not have an unrestricted right to determine the amount on the “tip line,” the 18% charge is considered a service charge. 2006 utah state tax return Do not include the 18% charge in your tip diary. 2006 utah state tax return Service charges that are paid to you are considered wages, not tips. 2006 utah state tax return Example 2. 2006 utah state tax return Good Food Restaurant also includes sample calculations of tip amounts at the bottom of its bills for food and beverages provided to customers. 2006 utah state tax return David’s bill includes a blank “tip line,” with sample tip calculations of 15%, 18%, and 20% of his charges for food and beverages at the bottom of the bill beneath the signature line. 2006 utah state tax return Because David is free to enter any amount on the “tip line” or leave it blank, any amount he includes is considered a tip. 2006 utah state tax return Be sure to include this amount in your tip diary. 2006 utah state tax return Reporting Tips to Your Employer Why report tips to your employer. 2006 utah state tax return   You must report tips to your employer so that: Your employer can withhold federal income tax and social security, Medicare, Additional Medicare, or railroad retirement taxes, Your employer can report the correct amount of your earnings to the Social Security Administration or Railroad Retirement Board (which affects your benefits when you retire or if you become disabled, or your family's benefits if you die), and You can avoid the penalty for not reporting tips to your employer (explained later). 2006 utah state tax return What tips to report. 2006 utah state tax return   Report to your employer only cash, check, and debit and credit card tips you receive. 2006 utah state tax return   If your total tips for any 1 month from any one job are less than $20, do not report the tips for that month to that employer. 2006 utah state tax return   If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. 2006 utah state tax return Do not report to your employer any portion of the tips you receive that you pass on to other employees. 2006 utah state tax return However, you must report tips you receive from other employees. 2006 utah state tax return    Do not report the value of any noncash tips, such as tickets or passes, to your employer. 2006 utah state tax return You do not pay social security, Medicare, Additional Medicare or railroad retirement taxes on these tips. 2006 utah state tax return How to report. 2006 utah state tax return    If your employer does not give you any other way to report tips, you can use Form 4070. 2006 utah state tax return Fill in the information asked for on the form, sign and date the form, and give it to your employer. 2006 utah state tax return To get a 1-year supply of the form, ask the IRS or your employer for Publication 1244. 2006 utah state tax return   If you do not use Form 4070, give your employer a statement with the following information. 2006 utah state tax return Your name, address, and social security number. 2006 utah state tax return Your employer's name, address, and business name (if it is different from your employer's name). 2006 utah state tax return The month (or the dates of any shorter period) in which you received tips. 2006 utah state tax return The total tips required to be reported for that period. 2006 utah state tax return You must sign and date the statement. 2006 utah state tax return Be sure to keep a copy with your tax or other personal records. 2006 utah state tax return   Your employer may require you to report your tips more than once a month. 2006 utah state tax return However, the statement cannot cover a period of more than 1 calendar month. 2006 utah state tax return Electronic tip statement. 2006 utah state tax return   Your employer can have you furnish your tip statements electronically. 2006 utah state tax return When to report. 2006 utah state tax return   Give your report for each month to your employer by the 10th of the next month. 2006 utah state tax return If the 10th falls on a Saturday, Sunday, or legal holiday, give your employer the report by the next day that is not a Saturday, Sunday, or legal holiday. 2006 utah state tax return Example. 2006 utah state tax return You must report your tips received in September 2014 by October 10, 2014. 2006 utah state tax return Final report. 2006 utah state tax return   If your employment ends during the month, you can report your tips when your employment ends. 2006 utah state tax return Penalty for not reporting tips. 2006 utah state tax return   If you do not report tips to your employer as required, you may be subject to a penalty equal to 50% of the social security, Medicare, and Additional Medicare taxes or railroad retirement tax you owe on the unreported tips. 2006 utah state tax return (For information about these taxes, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, later. 2006 utah state tax return ) The penalty amount is in addition to the taxes you owe. 2006 utah state tax return   You can avoid this penalty if you can show reasonable cause for not reporting the tips to your employer. 2006 utah state tax return To do so, attach a statement to your return explaining why you did not report them. 2006 utah state tax return Giving your employer money for taxes. 2006 utah state tax return   Your regular pay may not be enough for your employer to withhold all the taxes you owe on your regular pay plus your reported tips. 2006 utah state tax return If this happens, you can give your employer money until the close of the calendar year to pay the rest of the taxes. 2006 utah state tax return   If you do not give your employer enough money, your employer will apply your regular pay and any money you give in the following order. 2006 utah state tax return All taxes on your regular pay. 2006 utah state tax return Social security, Medicare, and Additional Medicare taxes or railroad retirement taxes on your reported tips. 2006 utah state tax return Federal, state, and local income taxes on your reported tips. 2006 utah state tax return    Any taxes that remain unpaid can be collected by your employer from your next paycheck. 2006 utah state tax return If withholding taxes remain uncollected at the end of the year, you may be subject to a penalty for underpayment of estimated taxes. 2006 utah state tax return See Publication 505, Tax Withholding and Estimated Tax, for more information. 2006 utah state tax return    Uncollected taxes. 2006 utah state tax return You must report on your tax return any social security and Medicare taxes or railroad retirement tax that remained uncollected at the end of 2013. 2006 utah state tax return These uncollected taxes will be shown on your 2013 Form W-2. 2006 utah state tax return See Reporting uncollected social security, Medicare, or railroad retirement taxes on tips reported to your employer under Reporting Tips on Your Tax Return, later. 2006 utah state tax return Reporting Tips on Your Tax Return How to report tips. 2006 utah state tax return    Report your tips with your wages on Form 1040, line 7; Form 1040A, line 7; or Form 1040EZ, line 1. 2006 utah state tax return What tips to report. 2006 utah state tax return   You must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. 2006 utah state tax return Any tips you reported to your employer for 2013 are included in the wages shown in box 1 of your Form W-2. 2006 utah state tax return Add to the amount in box 1 only the tips you did not report to your employer. 2006 utah state tax return    If you received $20 or more in cash and charge tips in a month and did not report all of those tips to your employer, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer, later. 2006 utah state tax return    If you did not keep a daily tip record as required and an amount is shown in box 8 of your Form W-2, see Allocated Tips, later. 2006 utah state tax return   If you kept a daily tip record and reported tips to your employer as required under the rules explained earlier, add the following tips to the amount in box 1 of your Form W-2. 2006 utah state tax return Cash and charge tips you received that totaled less than $20 for any month. 2006 utah state tax return The value of noncash tips, such as tickets, passes, or other items of value. 2006 utah state tax return Example. 2006 utah state tax return Ben Smith began working at the Blue Ocean Restaurant (his only employer in 2013) on June 30 and received $10,000 in wages during the year. 2006 utah state tax return Ben kept a daily tip record showing that his tips for June were $18 and his tips for the rest of the year totaled $7,000. 2006 utah state tax return He was not required to report his June tips to his employer, but he reported all of the rest of his tips to his employer as required. 2006 utah state tax return Ben's Form W-2 from Blue Ocean Restaurant shows $17,000 ($10,000 wages plus $7,000 reported tips) in box 1. 2006 utah state tax return He adds the $18 unreported tips to that amount and reports $17,018 as wages on his tax return. 2006 utah state tax return Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer. 2006 utah state tax return    If you received $20 or more in cash and charge tips in a month from any one job and did not report all of those tips to your employer, you must report the social security, Medicare, and Additional Medicare taxes on the unreported tips as additional tax on your return. 2006 utah state tax return To report these taxes, you must file a return even if you would not otherwise have to file. 2006 utah state tax return You must use Form 1040. 2006 utah state tax return (You cannot file Form 1040EZ or Form 1040A. 2006 utah state tax return )    Use Form 4137 to figure social security and Medicare taxes. 2006 utah state tax return Enter the tax on your return as instructed, and attach the completed Form 4137 to your return. 2006 utah state tax return Use Form 8959 to figure Additional Medicare Tax. 2006 utah state tax return    If you are subject to the Railroad Retirement Tax Act, you cannot use Form 4137 to pay railroad retirement tax on unreported tips. 2006 utah state tax return To get railroad retirement credit, you must report tips to your employer. 2006 utah state tax return Reporting uncollected social security, Medicare, or railroad retirement taxes on tips reported to your employer. 2006 utah state tax return   You may have uncollected taxes if your regular pay was not enough for your employer to withhold all the taxes you owe and you did not give your employer enough money to pay the rest of the taxes. 2006 utah state tax return For more information, see Giving your employer money for taxes , under Reporting Tips to Your Employer, earlier. 2006 utah state tax return   If your employer could not collect all the social security and Medicare taxes or railroad retirement tax you owe on tips reported for 2013, the uncollected taxes will be shown in box 12 of your Form W-2 (codes A and B). 2006 utah state tax return You must report these amounts as additional tax on your return. 2006 utah state tax return Unlike the uncollected portion of the regular (1. 2006 utah state tax return 45%) Medicare tax, the uncollected Additional Medicare Tax is not reported in box 12 of Form W-2 with code B. 2006 utah state tax return    To report these uncollected taxes, you must file a return even if you would not otherwise have to file. 2006 utah state tax return You must report these taxes on Form 1040, line 60. 2006 utah state tax return See the instructions for Form 1040, line 60. 2006 utah state tax return (You cannot file Form 1040EZ or Form 1040A. 2006 utah state tax return ) Allocated Tips If your employer allocated tips to you, they are shown separately in box 8 of your Form W-2. 2006 utah state tax return They are not included in box 1 with your wages and reported tips. 2006 utah state tax return If box 8 is blank, this discussion does not apply to you. 2006 utah state tax return What are allocated tips. 2006 utah state tax return   These are tips that your employer assigned to you in addition to the tips you reported to your employer for the year. 2006 utah state tax return Your employer will have done this only if: You worked in an establishment (restaurant, cocktail lounge, or similar business) that must allocate tips to employees, and The tips you reported to your employer were less than your share of 8% of food and drink sales. 2006 utah state tax return No income, social security, Medicare, Additional Medicare or railroad retirement taxes are withheld on allocated tips. 2006 utah state tax return How were your allocated tips figured. 2006 utah state tax return   The tips allocated to you are your share of an amount figured by subtracting the reported tips of all employees from 8% (or an approved lower rate) of food and drink sales (other than carryout sales and sales with a service charge of 10% or more). 2006 utah state tax return Your share of that amount was figured using either a method provided by an employer-employee agreement or a method provided by IRS regulations based on employees' sales or hours worked. 2006 utah state tax return For information about the exact allocation method used, ask your employer. 2006 utah state tax return Must you report your allocated tips on your tax return. 2006 utah state tax return   You must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. 2006 utah state tax return Any tips you reported to your employer for 2013 are included in the wages shown in box 1 of your Form W-2. 2006 utah state tax return Add to the amount in box 1 only the tips you did not report to your employer. 2006 utah state tax return This should include any allocated tips shown in box 8 on your Form(s) W-2, unless you have adequate records to show that you received less tips in the year than the allocated figures. 2006 utah state tax return   See What tips to report under Reporting Tips on Your Tax Return, and Keeping a Daily Tip Record , earlier. 2006 utah state tax return How to report allocated tips. 2006 utah state tax return   Report the amount in box 1 and the allocated tips in box 8 of your Form(s) W-2 as wages on Form 1040, line 7; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. 2006 utah state tax return (You cannot file Form 1040A or Form 1040EZ when you have allocated tips. 2006 utah state tax return )    Because social security, Medicare, and Additional Medicare taxes were not withheld from the allocated tips, you must report those taxes as additional tax on your return. 2006 utah state tax return Complete Form 4137, and include the allocated tips on line 1 of the form. 2006 utah state tax return See Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, earlier. 2006 utah state tax return Prev  Up  Next   Home   More Online 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The 2006 Utah State Tax Return

2006 utah state tax return 18. 2006 utah state tax return   Alimony Table of Contents IntroductionSpouse or former spouse. 2006 utah state tax return Divorce or separation instrument. 2006 utah state tax return Useful Items - You may want to see: General RulesMortgage payments. 2006 utah state tax return Taxes and insurance. 2006 utah state tax return Other payments to a third party. 2006 utah state tax return Instruments Executed After 1984Payments to a third party. 2006 utah state tax return Exception. 2006 utah state tax return Substitute payments. 2006 utah state tax return Specifically designated as child support. 2006 utah state tax return Contingency relating to your child. 2006 utah state tax return Clearly associated with a contingency. 2006 utah state tax return How To Deduct Alimony Paid How To Report Alimony Received Recapture Rule Introduction This chapter discusses the rules that apply if you pay or receive alimony. 2006 utah state tax return It covers the following topics. 2006 utah state tax return What payments are alimony. 2006 utah state tax return What payments are not alimony, such as child support. 2006 utah state tax return How to deduct alimony you paid. 2006 utah state tax return How to report alimony you received as income. 2006 utah state tax return Whether you must recapture the tax benefits of alimony. 2006 utah state tax return Recapture means adding back in your income all or part of a deduction you took in a prior year. 2006 utah state tax return Alimony is a payment to or for a spouse or former spouse under a divorce or separation instrument. 2006 utah state tax return It does not include voluntary payments that are not made under a divorce or separation instrument. 2006 utah state tax return Alimony is deductible by the payer and must be included in the spouse's or former spouse's income. 2006 utah state tax return Although this chapter is generally written for the payer of the alimony, the recipient can use the information to determine whether an amount received is alimony. 2006 utah state tax return To be alimony, a payment must meet certain requirements. 2006 utah state tax return Different requirements generally apply to payments under instruments executed after 1984 and to payments under instruments executed before 1985. 2006 utah state tax return This chapter discusses the rules for payments under instruments executed after 1984. 2006 utah state tax return If you need the rules for payments under pre-1985 instruments, get and keep a copy of the 2004 version of Publication 504. 2006 utah state tax return That was the last year the information on pre-1985 instruments was included in Publication 504. 2006 utah state tax return Use Table 18-1 in this chapter as a guide to determine whether certain payments are considered alimony. 2006 utah state tax return Definitions. 2006 utah state tax return   The following definitions apply throughout this chapter. 2006 utah state tax return Spouse or former spouse. 2006 utah state tax return   Unless otherwise stated, the term “spouse” includes former spouse. 2006 utah state tax return Divorce or separation instrument. 2006 utah state tax return   The term “divorce or separation instrument” means: A decree of divorce or separate maintenance or a written instrument incident to that decree, A written separation agreement, or A decree or any type of court order requiring a spouse to make payments for the support or maintenance of the other spouse. 2006 utah state tax return This includes a temporary decree, an interlocutory (not final) decree, and a decree of alimony pendente lite (while awaiting action on the final decree or agreement). 2006 utah state tax return Useful Items - You may want to see: Publication 504 Divorced or Separated Individuals General Rules The following rules apply to alimony regardless of when the divorce or separation instrument was executed. 2006 utah state tax return Payments not alimony. 2006 utah state tax return   Not all payments under a divorce or separation instrument are alimony. 2006 utah state tax return Alimony does not include: Child support, Noncash property settlements, Payments that are your spouse's part of community income, as explained under Community Property in Publication 504, Payments to keep up the payer's property, or Use of the payer's property. 2006 utah state tax return Payments to a third party. 2006 utah state tax return   Cash payments, checks, or money orders to a third party on behalf of your spouse under the terms of your divorce or separation instrument can be alimony, if they otherwise qualify. 2006 utah state tax return These include payments for your spouse's medical expenses, housing costs (rent, utilities, etc. 2006 utah state tax return ), taxes, tuition, etc. 2006 utah state tax return The payments are treated as received by your spouse and then paid to the third party. 2006 utah state tax return Life insurance premiums. 2006 utah state tax return   Alimony includes premiums you must pay under your divorce or separation instrument for insurance on your life to the extent your spouse owns the policy. 2006 utah state tax return Payments for jointly-owned home. 2006 utah state tax return   If your divorce or separation instrument states that you must pay expenses for a home owned by you and your spouse, some of your payments may be alimony. 2006 utah state tax return Mortgage payments. 2006 utah state tax return   If you must pay all the mortgage payments (principal and interest) on a jointly-owned home, and they otherwise qualify as alimony, you can deduct one-half of the total payments as alimony. 2006 utah state tax return If you itemize deductions and the home is a qualified home, you can claim one-half of the interest in figuring your deductible interest. 2006 utah state tax return Your spouse must report one-half of the payments as alimony received. 2006 utah state tax return If your spouse itemizes deductions and the home is a qualified home, he or she can claim one-half of the interest on the mortgage in figuring deductible interest. 2006 utah state tax return Taxes and insurance. 2006 utah state tax return   If you must pay all the real estate taxes or insurance on a home held as tenants in common, you can deduct one-half of these payments as alimony. 2006 utah state tax return Your spouse must report one-half of these payments as alimony received. 2006 utah state tax return If you and your spouse itemize deductions, you can each claim one-half of the real estate taxes and none of the home insurance. 2006 utah state tax return    If your home is held as tenants by the entirety or joint tenants, none of your payments for taxes or insurance are alimony. 2006 utah state tax return But if you itemize deductions, you can claim all of the real estate taxes and none of the home insurance. 2006 utah state tax return Other payments to a third party. 2006 utah state tax return   If you made other third-party payments, see Publication 504 to see whether any part of the payments qualifies as alimony. 2006 utah state tax return Instruments Executed After 1984 The following rules for alimony apply to payments under divorce or separation instruments executed after 1984. 2006 utah state tax return Exception for instruments executed before 1985. 2006 utah state tax return   There are two situations where the rules for instruments executed after 1984 apply to instruments executed before 1985. 2006 utah state tax return A divorce or separation instrument executed before 1985 and then modified after 1984 to specify that the after-1984 rules will apply. 2006 utah state tax return A temporary divorce or separation instrument executed before 1985 and incorporated into, or adopted by, a final decree executed after 1984 that: Changes the amount or period of payment, or Adds or deletes any contingency or condition. 2006 utah state tax return   For the rules for alimony payments under pre-1985 instruments not meeting these exceptions, get the 2004 version of Publication 504 at www. 2006 utah state tax return irs. 2006 utah state tax return gov/pub504. 2006 utah state tax return Example 1. 2006 utah state tax return In November 1984, you and your former spouse executed a written separation agreement. 2006 utah state tax return In February 1985, a decree of divorce was substituted for the written separation agreement. 2006 utah state tax return The decree of divorce did not change the terms for the alimony you pay your former spouse. 2006 utah state tax return The decree of divorce is treated as executed before 1985. 2006 utah state tax return Alimony payments under this decree are not subject to the rules for payments under instruments executed after 1984. 2006 utah state tax return Example 2. 2006 utah state tax return Assume the same facts as in Example 1 except that the decree of divorce changed the amount of the alimony. 2006 utah state tax return In this example, the decree of divorce is not treated as executed before 1985. 2006 utah state tax return The alimony payments are subject to the rules for payments under instruments executed after 1984. 2006 utah state tax return Alimony requirements. 2006 utah state tax return   A payment to or for a spouse under a divorce or separation instrument is alimony if the spouses do not file a joint return with each other and all the following requirements are met. 2006 utah state tax return The payment is in cash. 2006 utah state tax return The instrument does not designate the payment as not alimony. 2006 utah state tax return Spouses legally separated under a decree of divorce or separate maintenance are not members of the same household. 2006 utah state tax return There is no liability to make any payment (in cash or property) after the death of the recipient spouse. 2006 utah state tax return The payment is not treated as child support. 2006 utah state tax return Each of these requirements is discussed below. 2006 utah state tax return Cash payment requirement. 2006 utah state tax return   Only cash payments, including checks and money orders, qualify as alimony. 2006 utah state tax return The following do not qualify as alimony. 2006 utah state tax return Transfers of services or property (including a debt instrument of a third party or an annuity contract). 2006 utah state tax return Execution of a debt instrument by the payer. 2006 utah state tax return The use of the payer's property. 2006 utah state tax return Payments to a third party. 2006 utah state tax return   Cash payments to a third party under the terms of your divorce or separation instrument can qualify as cash payments to your spouse. 2006 utah state tax return See Payments to a third party under General Rules, earlier. 2006 utah state tax return   Also, cash payments made to a third party at the written request of your spouse may qualify as alimony if all the following requirements are met. 2006 utah state tax return The payments are in lieu of payments of alimony directly to your spouse. 2006 utah state tax return The written request states that both spouses intend the payments to be treated as alimony. 2006 utah state tax return You receive the written request from your spouse before you file your return for the year you made the payments. 2006 utah state tax return Payments designated as not alimony. 2006 utah state tax return   You and your spouse can designate that otherwise qualifying payments are not alimony. 2006 utah state tax return You do this by including a provision in your divorce or separation instrument that states the payments are not deductible as alimony by you and are excludable from your spouse's income. 2006 utah state tax return For this purpose, any instrument (written statement) signed by both of you that makes this designation and that refers to a previous written separation agreement is treated as a written separation agreement (and therefore a divorce or separation instrument). 2006 utah state tax return If you are subject to temporary support orders, the designation must be made in the original or a later temporary support order. 2006 utah state tax return   Your spouse can exclude the payments from income only if he or she attaches a copy of the instrument designating them as not alimony to his or her return. 2006 utah state tax return The copy must be attached each year the designation applies. 2006 utah state tax return Spouses cannot be members of the same household. 2006 utah state tax return    Payments to your spouse while you are members of the same household are not alimony if you are legally separated under a decree of divorce or separate maintenance. 2006 utah state tax return A home you formerly shared is considered one household, even if you physically separate yourselves in the home. 2006 utah state tax return   You are not treated as members of the same household if one of you is preparing to leave the household and does leave no later than 1 month after the date of the payment. 2006 utah state tax return Exception. 2006 utah state tax return   If you are not legally separated under a decree of divorce or separate maintenance, a payment under a written separation agreement, support decree, or other court order may qualify as alimony even if you are members of the same household when the payment is made. 2006 utah state tax return Table 18-1. 2006 utah state tax return Alimony Requirements (Instruments Executed After 1984) Payments ARE alimony if all of the following are true: Payments are NOT alimony if any of the following are true: Payments are required by a divorce or separation instrument. 2006 utah state tax return Payments are not required by a divorce or separation instrument. 2006 utah state tax return Payer and recipient spouse do not file a joint return with each other. 2006 utah state tax return Payer and recipient spouse file a joint return with each other. 2006 utah state tax return Payment is in cash (including checks or money orders). 2006 utah state tax return Payment is: Not in cash, A noncash property settlement, Spouse's part of community income, or To keep up the payer's property. 2006 utah state tax return Payment is not designated in the instrument as not alimony. 2006 utah state tax return Payment is designated in the instrument as not alimony. 2006 utah state tax return Spouses legally separated under a decree of divorce or separate maintenance are not members of the same household. 2006 utah state tax return Spouses legally separated under a decree of divorce or separate maintenance are members of the same household. 2006 utah state tax return Payments are not required after death of the recipient spouse. 2006 utah state tax return Payments are required after death of the recipient spouse. 2006 utah state tax return Payment is not treated as child support. 2006 utah state tax return Payment is treated as child support. 2006 utah state tax return These payments are deductible by the payer and includible in income by the recipient. 2006 utah state tax return These payments are neither deductible by the payer nor includible in income by the recipient. 2006 utah state tax return Liability for payments after death of recipient spouse. 2006 utah state tax return   If any part of payments you make must continue to be made for any period after your spouse's death, that part of your payments is not alimony, whether made before or after the death. 2006 utah state tax return If all of the payments would continue, then none of the payments made before or after the death are alimony. 2006 utah state tax return   The divorce or separation instrument does not have to expressly state that the payments cease upon the death of your spouse if, for example, the liability for continued payments would end under state law. 2006 utah state tax return Example. 2006 utah state tax return You must pay your former spouse $10,000 in cash each year for 10 years. 2006 utah state tax return Your divorce decree states that the payments will end upon your former spouse's death. 2006 utah state tax return You must also pay your former spouse or your former spouse's estate $20,000 in cash each year for 10 years. 2006 utah state tax return The death of your spouse would not terminate these payments under state law. 2006 utah state tax return The $10,000 annual payments may qualify as alimony. 2006 utah state tax return The $20,000 annual payments that do not end upon your former spouse's death are not alimony. 2006 utah state tax return Substitute payments. 2006 utah state tax return   If you must make any payments in cash or property after your spouse's death as a substitute for continuing otherwise qualifying payments before the death, the otherwise qualifying payments are not alimony. 2006 utah state tax return To the extent that your payments begin, accelerate, or increase because of the death of your spouse, otherwise qualifying payments you made may be treated as payments that were not alimony. 2006 utah state tax return Whether or not such payments will be treated as not alimony depends on all the facts and circumstances. 2006 utah state tax return Example 1. 2006 utah state tax return Under your divorce decree, you must pay your former spouse $30,000 annually. 2006 utah state tax return The payments will stop at the end of 6 years or upon your former spouse's death, if earlier. 2006 utah state tax return Your former spouse has custody of your minor children. 2006 utah state tax return The decree provides that if any child is still a minor at your spouse's death, you must pay $10,000 annually to a trust until the youngest child reaches the age of majority. 2006 utah state tax return The trust income and corpus (principal) are to be used for your children's benefit. 2006 utah state tax return These facts indicate that the payments to be made after your former spouse's death are a substitute for $10,000 of the $30,000 annual payments. 2006 utah state tax return Of each of the $30,000 annual payments, $10,000 is not alimony. 2006 utah state tax return Example 2. 2006 utah state tax return Under your divorce decree, you must pay your former spouse $30,000 annually. 2006 utah state tax return The payments will stop at the end of 15 years or upon your former spouse's death, if earlier. 2006 utah state tax return The decree provides that if your former spouse dies before the end of the 15-year period, you must pay the estate the difference between $450,000 ($30,000 × 15) and the total amount paid up to that time. 2006 utah state tax return For example, if your spouse dies at the end of the tenth year, you must pay the estate $150,000 ($450,000 − $300,000). 2006 utah state tax return These facts indicate that the lump-sum payment to be made after your former spouse's death is a substitute for the full amount of the $30,000 annual payments. 2006 utah state tax return None of the annual payments are alimony. 2006 utah state tax return The result would be the same if the payment required at death were to be discounted by an appropriate interest factor to account for the prepayment. 2006 utah state tax return Child support. 2006 utah state tax return   A payment that is specifically designated as child support or treated as specifically designated as child support under your divorce or separation instrument is not alimony. 2006 utah state tax return The amount of child support may vary over time. 2006 utah state tax return Child support payments are not deductible by the payer and are not taxable to the recipient. 2006 utah state tax return Specifically designated as child support. 2006 utah state tax return   A payment will be treated as specifically designated as child support to the extent that the payment is reduced either: On the happening of a contingency relating to your child, or At a time that can be clearly associated with the contingency. 2006 utah state tax return A payment may be treated as specifically designated as child support even if other separate payments are specifically designated as child support. 2006 utah state tax return Contingency relating to your child. 2006 utah state tax return   A contingency relates to your child if it depends on any event relating to that child. 2006 utah state tax return It does not matter whether the event is certain or likely to occur. 2006 utah state tax return Events relating to your child include the child's: Becoming employed, Dying, Leaving the household, Leaving school, Marrying, or Reaching a specified age or income level. 2006 utah state tax return Clearly associated with a contingency. 2006 utah state tax return   Payments that would otherwise qualify as alimony are presumed to be reduced at a time clearly associated with the happening of a contingency relating to your child only in the following situations. 2006 utah state tax return The payments are to be reduced not more than 6 months before or after the date the child will reach 18, 21, or local age of majority. 2006 utah state tax return The payments are to be reduced on two or more occasions that occur not more than 1 year before or after a different one of your children reaches a certain age from 18 to 24. 2006 utah state tax return This certain age must be the same for each child, but need not be a whole number of years. 2006 utah state tax return In all other situations, reductions in payments are not treated as clearly associated with the happening of a contingency relating to your child. 2006 utah state tax return   Either you or the IRS can overcome the presumption in the two situations above. 2006 utah state tax return This is done by showing that the time at which the payments are to be reduced was determined independently of any contingencies relating to your children. 2006 utah state tax return For example, if you can show that the period of alimony payments is customary in the local jurisdiction, such as a period equal to one-half of the duration of the marriage, you can overcome the presumption and may be able to treat the amount as alimony. 2006 utah state tax return How To Deduct Alimony Paid You can deduct alimony you paid, whether or not you itemize deductions on your return. 2006 utah state tax return You must file Form 1040. 2006 utah state tax return You cannot use Form 1040A or Form 1040EZ. 2006 utah state tax return Enter the amount of alimony you paid on Form 1040, line 31a. 2006 utah state tax return In the space provided on line 31b, enter your spouse's social security number (SSN) or individual taxpayer identification number (ITIN). 2006 utah state tax return If you paid alimony to more than one person, enter the SSN or ITIN of one of the recipients. 2006 utah state tax return Show the SSN or ITIN and amount paid to each other recipient on an attached statement. 2006 utah state tax return Enter your total payments on line 31a. 2006 utah state tax return You must provide your spouse's SSN or ITIN. 2006 utah state tax return If you do not, you may have to pay a $50 penalty and your deduction may be disallowed. 2006 utah state tax return For more information on SSNs and ITINs, see Social Security Number (SSN) in chapter 1. 2006 utah state tax return How To Report Alimony Received Report alimony you received as income on Form 1040, line 11. 2006 utah state tax return You cannot use Form 1040A or Form 1040EZ. 2006 utah state tax return You must give the person who paid the alimony your SSN or ITIN. 2006 utah state tax return If you do not, you may have to pay a $50 penalty. 2006 utah state tax return Recapture Rule If your alimony payments decrease or end during the first 3 calendar years, you may be subject to the recapture rule. 2006 utah state tax return If you are subject to this rule, you have to include in income in the third year part of the alimony payments you previously deducted. 2006 utah state tax return Your spouse can deduct in the third year part of the alimony payments he or she previously included in income. 2006 utah state tax return The 3-year period starts with the first calendar year you make a payment qualifying as alimony under a decree of divorce or separate maintenance or a written separation agreement. 2006 utah state tax return Do not include any time in which payments were being made under temporary support orders. 2006 utah state tax return The second and third years are the next 2 calendar years, whether or not payments are made during those years. 2006 utah state tax return The reasons for a reduction or end of alimony payments that can require a recapture include: A change in your divorce or separation instrument, A failure to make timely payments, A reduction in your ability to provide support, or A reduction in your spouse's support needs. 2006 utah state tax return When to apply the recapture rule. 2006 utah state tax return   You are subject to the recapture rule in the third year if the alimony you pay in the third year decreases by more than $15,000 from the second year or the alimony you pay in the second and third years decreases significantly from the alimony you pay in the first year. 2006 utah state tax return   When you figure a decrease in alimony, do not include the following amounts. 2006 utah state tax return Payments made under a temporary support order. 2006 utah state tax return Payments required over a period of at least 3 calendar years that vary because they are a fixed part of your income from a business or property, or from compensation for employment or self-employment. 2006 utah state tax return Payments that decrease because of the death of either spouse or the remarriage of the spouse receiving the payments before the end of the third year. 2006 utah state tax return Figuring the recapture. 2006 utah state tax return   You can use Worksheet 1 in Publication 504 to figure recaptured alimony. 2006 utah state tax return Including the recapture in income. 2006 utah state tax return   If you must include a recapture amount in income, show it on Form 1040, line 11 (“Alimony received”). 2006 utah state tax return Cross out “received” and enter “recapture. 2006 utah state tax return ” On the dotted line next to the amount, enter your spouse's last name and SSN or ITIN. 2006 utah state tax return Deducting the recapture. 2006 utah state tax return   If you can deduct a recapture amount, show it on Form 1040, line 31a (“Alimony paid”). 2006 utah state tax return Cross out “paid” and enter “recapture. 2006 utah state tax return ” In the space provided, enter your spouse's SSN or ITIN. 2006 utah state tax return Prev  Up  Next   Home   More Online Publications