How to Account for Offsets to Alimony Payments

I have a fixed alimony obligation every month–let’s call it $1,000 per month. But my ex-wife and I split certain expenses and I deduct half of those from my alimony payment. Let’s say I buy my daughter a $50 sweatshirt. My ex-wife and I will split the cost. My transactions will show a $50 expense for the sweatshirt and the following month, an alimony payment of $975 ($1,000 minus the $25 she owes me for the sweatshirt). Neither the $50 expense nor the $975 alimony payment is really accurate. Is there a good way to account for this?

The way I would handle this is by budgeting $1000 for alimony each month. Then when you buy the sweater you would split the transaction as $25 clothing/ $25 alimony. Then at the end of month you could see how much is left to pay in an actual alimony payment. You also have the record of all transactions that went towards the alimony pay down.

I’m sure there are other ways but this is how I would handle.


  1. You are right, the $50 and $975 are not accurate. Each number is off by $25. What you have actually done here is that you have loaned your ex-wife $25 and then she has paid you back $25.

  2. When the $50 hits your Transactions tab, use the spiller tool to split it in half. $25 should go to a category called something like Kid Expense - My Share. This category would be coded as an expense. The other $25 should go to a category called something like Loan To Ex-Wife. This category would be coded as a transfer, not an expense or income.

  3. When the $975 hits your Transactions tab, use the splitter tool to split it into two pieces. The first piece should go to a category called Alimony and should be for $1,000. This category would be coded as an expense. The second piece should go to the category called Loan To Ex-Wife and should be entered as a negative $25.

  4. So, you have loaned your Ex-Wife $25 by you paying for her 50% portion of the sweatshirt and she has paid you back by allowing you to short pay by $25 the alimony that you owe her.

  5. Instead of using Kid Expense - My Share for all purchases that you will split with your Ex-Wife, you could put them into your other normal categories if you wanted to; i.e., categories like Meals, Education, Phone, Travel, etc.

  6. If you use the Category Tracker tool, look at the Loan To Ex-Wife category and you will be able to see your Ex-Wife’s 50% portion of all purchases (these will be positive numbers) and you be able to see all of her repayments to you via alimony short pay (these will be negative numbers).

  7. If your divorce was finalized after 2018, then alimony payments are no longer deductible for federal tax purposes. Your state may differ.

Please let me know if there is anything else.


Thank you very much for this @richl. It’s a good solution and I implemented it earlier today, but then I got another response from @Blake which I think works just a little better. This is my first question to the Tiller community and I’m glad to have such well thought out and easily implementable responses.

Thank you @Blake. I think it’s a very elegant solution that I could not have arrived at on my own. I never would have thought to enter a negative number as a transaction. I like the fact that the spousal support expense reflects the true number each month, and as you say, the payment on the sweatshirt is truly tantamount to a loan, or an advance. And yes, we scrambled to finalize at the end of 2018 so that it is tax deductible. Thanks again.


I have received a few compliments in my life before but I do not ever remember anyone using the word elegant. Thank you. To me, Tiller is an accounting system (plus much more) and after being in the accounting industry for 30 years, I have lots of experience breaking down accounting and explaining it to others in a make sense and understandable manner.



@Blake, if could press you for another recommendation on this, which also happens. Same scenario, except she buys $10 worth of school supplies for my daughter in the same month. Now I would pay her $1,000 minus $25 plus $5, or $980. Any suggestions for how to record the $5 I owe her? Thank you.


  1. Great question.

  2. Generally, the Transactions tab shows cash coming in (income) and cash going out (expenses). But in the school supplies example, no cash is involved so I can certainly see the reason for the question. Think negative number.

  3. You will need to make a manual entry on the Transactions tab that nets to zero since there is no impact to cash. First, you will make an entry for a positive $5 to Kid Expense - My Share or maybe a more general category like Supplies. Second, you will make an entry for a negative $5 to Loan To Ex-Wife.

  4. The Loan to Ex-Wife is an asset. It started out at zero, then increased to positive $25 for the sweatshirt, and then got reduced by $5 for the school supplies, so now the balance for this asset is $20 (0+25-5).

  5. So, every month when you are about to pay your $1,000 alimony payment, you would just look at the balance in this account and short pay the $1,000 by this amount. If these were the only two items for the month, then you would pay $980 and code it as positive $1,000 to alimony and a negative $20 to Loan To Ex-Wife.

  6. Thus, at the end of the month, the Loan To Ex-Wife balance would now be 0 (0+25-5-20).

  7. Lets say everything above is the same except the sweatshirt is not purchased. The Loan To Ex-Wife will have a balance of negative $5. So, it will need to get zeroed out at the end of the month with a positive $5 entry. That entry would be a positive $1,000 to alimony and a positive $5 to Loan To Ex-Wife for a total cash payment on the Transactions tab of $1,005 (you would actually be splitting the $1,005 transaction into a $1,000 piece and a $5 piece).

  8. Although this Loan To Ex-Wife is an asset, you will not see it as an asset on your balance sheet (see Tiller Net Worth tabs) unless you take the extra step of tracking it manually on the Balance History tab. Do as you like, but you might consider passing on this since it is small in amount and in theory is getting zeroed out at the end of every month.

  9. No need to track all this separately anymore since you have Tiller. Just send the supporting Loan To Ex-Wife category detail every month with your check and you are done.

  10. Easy peasy, right?



Yes, that sounds like it is going to work extremely well. Thanks again @Blake.