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Fred and Jean were divorced in 2013
Fred and Jean were divorced in 2013. The divorce decree states that Fred will pay Jean monthly alimony of $2,000. Fred must also pay child support of $3,000 monthly, until the youngest child (age 12) graduates from high school. He pays Jean $6,000 a month this entire year. How much is deductible on Fred's return?
a.$60,000
b.$36,000
c.$72,000
d.$24,000
Which of the following statements is true regarding Form W-2?
a.Box 2 of W-2 is where employers should report taxable wages, salary, bonuses and almost every type of taxable compensation.
b.If a taxpayer receives more than one Form W-2, the amounts in Box 1 are not combined before entering on Form 1040.
c.Form W-2 does not report the amount of federal income tax withheld from the taxpayer's wages by the employer for the year.
d.State and local tax information is reported at the bottom of Form W-2 in Boxes 15 through 20.
Expert Solution
Question 1:
For couples divorced before January 1, 2019; the person paying the alimony can claim its tax deduction provided the person receiving it adds it to their taxable income. However, child support amount is not tax deductible.
Hence, the correct answer is d. $ 24,000 ($ 2,000 per month * 12 months)
Question 2:
The correct answer is d. State and local tax information is reported at the bottom of Form W-2 in Boxes 15 through 20. Boxes 15 to 20 have the following columns:
15. Employer’s state ID number
16 State wages, tips, etc.
17 State income tax
18 Local wages, tips, etc.
19 Local income tax
20 Locality name
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