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3 Tax Issues to Be Aware of in Your Illinois Divorce Case

Posted on in Illinois Divorce

IL divorce lawyerIf you are getting divorced, you may be well aware of the financial consequences of ending a marriage. You may have already started gathering financial documents and creating a budget for your post-divorce life. Financial concerns are a major part of the divorce process. Not only do spouses have to divide marital property and address issues like child support and spousal support, they must also deal with the tax implications of these matters. The decisions you make during your divorce can impact your finances for years after the split. This is why it is important to research your options and work with an experienced divorce attorney.

Handling Tax Returns in the Middle of a Divorce

Filing taxes is already stressful. Filing taxes in the middle of a divorce is even more confusing and overwhelming. If you are getting divorced, you may wonder if you can still file jointly. According to federal law, you may file a joint tax return if:

  • You were still technically married as of December 31 and
  • Both spouses agree to file jointly

By filing jointly, you may enjoy a decreased tax obligation. However, filing jointly may also mean that both spouses are liable for any tax penalties.

Assigning the Child Dependency Exemption

The parent that claims the children as dependents usually earns a greater tax refund. Consequently, deciding who should claim the children on their taxes can sometimes be a contentious issue. Some parents choose to claim the children on alternate years. When deciding how to handle child dependency exemptions, it is important to remember that claiming the exemption decreases your tax burden which increases your income. Because child support and spousal maintenance are largely based on the parties’ incomes, claiming the dependency exemption can actually increase your support obligation.

Taxes and Spousal Maintenance in Illinois

Spousal maintenance can be an important source of financial support after a divorce. However, it is important to understand the tax implications of maintenance payments. Significant changes to federal tax laws took place in 2019. Presently, spousal maintenance, sometimes called alimony, is not deductible by the paying spouse. Maintenance payments are not taxable by the recipient spouse.

Contact a St. Charles Divorce Lawyer

If you are getting divorced, it is important to consider the tax consequences of the split. For dependable guidance and skilled representation during your divorce, contact the Kane County divorce lawyers at Weiler & Lengle P.C.. We can help you with property division, child custody, child support, spousal maintenance, and much more. Call us at 630-382-8050 today for a confidential consultation.

Sources:

https://www.irs.gov/faqs/filing-requirements-status-dependents/filing-status/filing-status

https://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=075000050K504

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