Kane County Unallocated Alimony Lawyers
Attorneys for Unallocated Support in St. Charles, Elgin, and Batavia
There are many complicated issues which couples must take into consideration when negotiating a divorce settlement and working towards a favorable resolution. One such issue, the tax consequences regarding alimony/maintenance and child support payments, can impact both spouses. For example, combining both payments into what is called an “unallocated support” payment may have significant tax advantages.
The Kane County family law attorneys at The Stogsdill Law Firm, P.C. are knowledgeable in handling the tax advantages and disadvantages of divorce. Our attorneys work to obtain the best possible settlement for clients’ financial futures. If settlement is not possible, we are prepared to litigate for our clients in front of a judge.
Understanding Unallocated Support in Illinois
Alimony, which is also called maintenance in Illinois, and child support payments are classified differently by the Internal Revenue Service (IRS). Alimony, according to the Internal Revenue code, is tax-deductible for the paying spouse, and the alimony is taxed as income for the receiving spouse. Child support payments, in contrast, are not tax-deductible for the paying spouse, and the receiving spouse is not taxed for the received payments, as they are not seen as income.
Combining alimony and child support payments into a single payment allows both spouses to use the tax code to their advantage, as the unallocated support allows the paying spouse to treat the entire amount as an income deduction as they would if they solely paid alimony. However, the unallocated support may force the receiving spouse to pay taxes on the payment. This may be a beneficial arrangement for both parties, so it is important to discuss your concerns with your divorce attorney.
Building a Strategy for Unallocated Support
Although it appears that the paying spouse receives more benefits from unallocated support, the income shift to a lower tax bracket may benefit the receiving spouse as well who now pays taxes on the unallocated support payment. It is imperative to discuss the tax consequences of unallocated alimony with an attorney who has experience with support payments and the IRS guidelines governing such decisions. Additionally, both spouses must consent to the decision to have just one support payment if they are to have alimony and child support following divorce.
Contact The Stogsdill Law Firm, P.C. at 630-462-9500630-462-9500 to schedule a consultation if your divorce settlement might benefit from unallocated support. Our attorneys are prepared to discuss your concerns and the circumstances following your divorce which may provide your family with a stable financial future. We are dedicated to providing family law and divorce representation to Kane County residents.