Kane County Taxes and Divorce Attorneys
Lawyers for Tax Consequences in Divorce Serving Geneva, Batavia, and St. Charles
Filing a joint tax return allows married couples to generally enjoy a favored tax status, as they can make greater deductions on their taxes. They also enjoy a lower tax rate and may claim children as dependents, which would provide additional deductions. Divorce, however, can impact the amount of taxes you owe significantly.
The Kane County divorce attorneys at The Stogsdill Law Firm, P.C. provide knowledgeable guidance regarding the tax consequences following divorce. We consider tax strategies as they pertain to property settlement negotiations, and our attorneys provide skilled strategy in order to minimize tax consequences before divorce and following divorce. Our attorneys work to protect our clients’ interest.
Divorce and Child Dependency in Kane County
When a child is claimed as a dependent on taxes, you may receive an exemption of thousands of dollars on income taxes. Exemptions can be significant if a family has multiple children. However, following divorce, only one child may claim a child as a dependent on their taxes, and that parent must prove child dependency through a few requirements, including:
- For more than 50% of the year, the parent maintains physical custody; and
- The child must be less than 19 years old at the end of the year or less than 24 years old and a full-time student in order to be claimed as a dependent.
The divorce settlement negotiation can involve determining which spouse will take the child dependency exemption on their taxes. It is important to discuss your concerns with your attorney.
Alimony and Child Support Taxation
The IRS handles alimony, now known as maintenance, and child support payments differently on taxes. The paying spouse in alimony has the payments as tax deductible, and the recipient is taxed for alimony payments. In contrast, child support is neither tax deductible for the paying spouse nor taxed on the recipient.
Lumping child support and alimony together in what is called unallocated support can be beneficial from a tax perspective. If the couple mutually agrees to treat the alimony and child support payments as one payment, the paying spouse receives a tax deduction, resulting in a lower tax bracket. Even after taxes, the receiving spouse may receive a higher payment than if the alimony and child support were sent as separate payments, benefiting both the recipient and the paying spouse.
If you are involved in a divorce and want help determining the tax consequences following the proceedings, contact our attorneys at 630-462-9500630-462-9500 to schedule a consultation. The Kane County attorneys at The Stogsdill Law Firm, P.C. will answer your questions and discuss the particular circumstances relevant to your case.