What amount of her income is Elizabeth required to pay taxes on after paying alimony?

To determine the amount of income on which Elizabeth is required to pay taxes after considering alimony, it's important to understand how alimony is treated for tax purposes, especially under the guidelines set forth by the IRS.

Before the Tax Cuts and Jobs Act of 2017, alimony payments were tax-deductible for the payer and taxable income for the recipient. However, for any divorce agreements executed after December 31, 2018, alimony payments are no longer considered taxable income for the recipient. This change means that if Elizabeth is receiving alimony payments, she does not count them as income for tax purposes, which affects the amount she is taxed on.

Assuming Elizabeth has a total income of $200,000 and pays alimony, it is critical to know that the payment of alimony will reduce her taxable income. If the alimony paid is, for instance, $160,000, then Elizabeth's taxable income would be calculated by subtracting the alimony amount from her total income.

In this case, if Elizabeth is left with $40,000 after subtracting allowable deductions, then the correct interpretation of the question revolves around recognizing that after accounting for her allowable expenses, especially alimony, she will be taxed on her