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Tag Archives: spousal maintenance

DuPage County divorce lawyersChild support and alimony are often awarded to one of the spouses in a divorce, but not in every case. How do you determine if you may be eligible for these types of post-divorce support, and what can you do to ensure you receive the most amount possible? The following explains. 

Alimony Considerations in an Illinois Divorce 

Before a judge will award you alimony, you must be determined eligible, which generally requires that you be “disadvantaged” in some way. Examples of situations that may deem you “disadvantaged” in a divorce include:

  • A physical, mental, or emotional condition that prevents you from working;
  • A lack of education, skills, or recent work experience you need to obtain gainful employment;
  • Serving as a caregiver during your marriage (either to your children or your spouse); or
  • Supporting your spouse while they further their career or education (especially if it impacted you financially). 

If you are deemed eligible, a formula will be applied to your situation to determine your alimony entitlement and time-frame. The longer you were married, and the greater your spouse’s income, the greater your entitlement is likely to be in an Illinois divorce. 

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DuPage County spousal maintenance lawyer tax lawsNew tax laws that went into effect for this year have brought about quite a few changes. One major change, which could be bad news for those who are currently in the process of divorce, is that alimony (known as spousal maintenance under Illinois law) is no longer tax-deductible for those who pay it, and it will not be considered taxable income for those who receive it. This may be a major loss for people who are required to pay a large amount of alimony.

The 2018 Tax Cuts and Jobs Act (TCJA) is in effect now, and it applies to any divorce cases finalized after December 31, 2018. Therefore, going forward, any divorce that includes spousal maintenance will follow the new rules. Pre-2019 divorcees, however, may still qualify for the old rules.

Payors: Does Your Pre-2019 Agreement Meet Requirements for Tax-Deductible Alimony?

Many factors go into determining whether you can still deduct your spousal support payments from your taxes, including, but not limited to the following: 

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Illinois alimony attorneysAlimony, otherwise known as spousal maintenance, is not routinely awarded in Illinois. However, it is an element in some divorce cases. Learn how determinations regarding alimony are made, including how long you can expect to receive payments, and discover how a seasoned divorce lawyer can help you pursue the most favorable outcome in your case. 

Illinois’ Statutory Guidelines on Alimony 

Most of the time, family courts use a set of statutory guidelines to determine the amount and duration of alimony payments. While the court may deviate from these rules, they must either provide a valid reason for doing so, or the combined annual income of the parties must amount to more than $500,000. In those instances, the court may weigh several factors to determine the amount and duration of alimony payments (i.e. the length of the marriage, contributions of each party to the marital estate, ability to work, education, etc.). Otherwise, an alimony award is usually determined using a two-step process. 

  • The amount of alimony to be paid each year is determined by subtracting 20 percent of the receiving spouse’s gross income from 30 percent of the paying party’s gross income. 
  • The duration that alimony should be paid is determined by multiplying the years of marriage by a specific percentage (based on the number of years the parties were married). The product of the equation is the number of years that alimony will be paid. 

In 2018, the courts changed the multiplying factors used to determine the duration of spousal support, which has resulted in some parties receiving alimony for a shorter amount of time. These new percentages are as follows: 

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Illinois alimony lawyersAlimony, though awarded less frequently today than it once was, is still a component in some divorces. Thanks to the changing tax laws under the Tax Code and Jobs Act, the rules that once applied will be changing as well. More specifically, parties who pay alimony will not be eligible for a tax deduction if their divorce is finalized after December 31, 2018. Learn more about how this new law may impact your post-divorce finances and discover some strategies for minimizing the damage in the following sections. 

Alimony Under the New Tax Law

The new tax law removes the deduction that alimony paying spouse once received. Sadly, this can keep them in a higher tax bracket, which may ultimately impact the amount of alimony that they are willing to pay. The receiving spouse, though no longer required to pay taxes on their alimony money, may receive a lower award, thanks to their spouse’s tax bracket stance. The new tax law may also hinder negotiations, making for a longer, more drawn-out divorce, which also drives up the cost of divorce. In short, the new law could have a significant impact on the finances of all involved parties, both during and long after the divorce. 

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Illinois divorce lawyersTaxes, though not often discussed, are a critical element in almost every divorce, and they are especially important when alimony may be owed. Thanks to the new Tax Code and Jobs Act, everything about alimony and taxes will change, come the start of 2019. Find out how and discover what it could mean for your Illinois divorce in the following sections. 

The New Tax Law and Divorce - An Overview

While the new tax law may not affect all divorces, it is likely to have a significant impact on cases involving alimony. Parties who pay support and complete their divorce after December 31, 2018, will no longer receive a tax deduction at the end of the year, and receiving spouses will no longer be required to pay taxes on the alimony they receive. At first glance, this might seem like a benefit for the family, but appearances can be deceiving. 

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Abraham Lincoln A lawyer’s time and advice are his stock and trade. -Abraham Lincoln
Davi Law Group, LLC handles family law, estate planning and real estate matters for clients in Chicago and throughout the western suburbs including DuPage County, Will County, Kane County, Kendall County and Cook County and the cities of Aurora, Bloomingdale, Bolingbrook, Carol Stream, Darien, Downers Grove, Elmhurst, Geneva, Glen Ellyn, Hinsdale, Joliet, Kendall County, Lisle, Lombard, Naperville, Oak Park, Oak Brook, Oswego, Park Ridge, Roselle, St. Charles, Villa Park, Warrenville, Wheaton, Winfield, Woodridge and Yorkville, Illinois.
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