DuPage County Divorce Lawyers
Detail-Oriented Tax Considerations Attorneys in Illinois
At the Davi Law Group, we help our clients thoroughly understand the divorce process. Divorce, along with its emotional upheaval, can also cause financial issues at tax time. A sudden rise or fall in income and a change in filing status can have a definite impact on tax relief or obligations. Our attorneys work with financial professionals to ensure that every aspect of tax liabilities and gains are understood.
We communicate every issue and concern to our clients and help them make calculated decisions about spousal maintenance/alimony requests, division of property, division of debt, and business evaluations. Additionally, parentage can affect taxes since child support proceedings are likely to stem from a paternity determination. Whether you are seeking a divorce, legal separation, dissolution of civil union or determination of parentage/paternity, it is important to work with attorneys who are knowledgeable in all areas of family law and the associated tax considerations.
Tax Filing Considerations During and After Divorce
If you are still married on December 31st of a given tax year, but are going through a divorce in the subsequent year, you and your ex-spouse must decide how you will file. If both parties agree to file as “married filing jointly” it may reduce your tax burden. If the divorce is final on or before December 31st of a tax year, then you can no longer file as a married couple, but may file as head of household or single. We explain the pros and cons of selecting a filing status and also request that our clients consider the timing of the divorce judgment.
Exemptions for Custodial and Non-Custodial Parents
If you have children, your physical custody of that child may have tax benefits. Tax codes provide that a parent with the majority of the parenting time for his or her child and provides more than half of the support is entitled to receive exemptions. The custodial parent can also release the claim for exemption so that the non-custodial parent can claim the exemption by using IRS Form 8332. The custodial parent can also use the same form to revoke a previous release of claim. Recent updates to the state's laws regarding child custody and parenting time are likely to impact tax concerns as well, and we are prepared to assist you in understanding the changes.
Tax Considerations for Division of Property
At the Davi Law Group, we provide comprehensive support for divorce issues. We have professional resources dedicated to tax issue analysis based on your specific circumstances. Taxes may impact a transfer of property, receipt of investment stock, and even support awards. Making a mistake about tax liabilities can cause a severe blow to your financial well-being. We advise our clients not to pursue any situation that will negatively impact their quality of life.
Impact of Maintenance on Tax Obligations
Maintenance may have tax benefits or consequences. For the payor, the amount is tax deductible. For the payee receiving the benefit, the funds are considered taxable income. We can advise you on the best way to handle such matters, advising you on equitable awards, helping you through modifications, and making decisions about unallocated support. Unallocated support is a payment that combines child support and maintenance, is fully deductible to the payor, and includible to the payee. There are benefits for the payor and the payee under this situation that the attorneys at the Davi Law Group have to knowledge and experience to fully explain and apply to your situation.
If you are facing a divorce and have tax questions, the Davi Law Group can help. We invite you to meet with us for an initial consultation. We will listen to the details of your situation and share our perspective at no charge, which has a value of up to $325.00. If you live in Illinois, please contact our firm today to schedule an appointment at our offices in Chicago, Warrenville, Joliet and Wheaton, Illinois.