Few spouses actually look forward to going through the Illinois divorce process, but there are reasons you may want to get started as soon as possible. There are a number of advantages to getting divorced before the end of 2018, but you can only reap the benefits if you file for divorce and conclude the case by December 31, 2018. An experienced Illinois divorce attorney can tell you how these benefits may apply to your situation, but an overview may be helpful.
- Implications for Spousal Support: If you finalize your divorce and enter the appropriate orders in court by the end of the year, alimony will remain tax deductible for the duration of the agreement. You may experience significant savings on your income tax return. This change to the tax law also means that the recipient must claim payments received. However, please take notice that if you settle your case before December 31, 2018, any year end bonuses paid out to your spouse may be considered non marital assets.
- Pre- and Post-Nuptial Agreements: The tax law also has implications for pre-nuptial agreements in Illinois. If you have included certain terms and conditions, the tax statute that kicks in on January 1, 2018 may render some of them moot. For instance, you may have made arrangements for payment of alimony under the assumption that it would be deductible for the payor and taxable for the recipient. You may want to make adjustments now that this no longer applies.
- Effects on Your Family Home: The same tax law reduces the deductibility of property taxes and mortgage interest on your family home. The end result is that it will be more costly to own a home, starting in January 2019. Therefore, you can receive up to $500,000 without being taxed on it if you are married. As a single person, the amount is $250,000. It may make more sense to go through the divorce process and sell your home before December 31.
- Claiming Children: Under the new tax code, you will no longer be able to claim a personal exemption for 2018 through 2025. This means that you will not receive the advantage of the multiplier that applies to children on your income tax return. As you are going through divorce and trying to finalize by the end of 2018, you may want to enter into an agreement with your spouse on how will claim the children. One parent may receive the benefit of child tax credits, which are advantageous under the new law.
Consult with a Knowledgeable Divorce Attorney About Your Case
At Glasgow & Olsson, our divorce lawyers know that the process can be confusing. At the same time, you could be going through emotions that make it difficult to understand your rights and options. We are here to shoulder the legal burdens, so you can look forward to a bright future. If you would like to know more about the benefits of getting started with a divorce case right away, please call 847-577-8700 to set up a consultation. You can also go online to learn more about our legal services for Illinois residents in Cook, Lake, DuPage, and McHenry Counties.
(image courtesy of Estefania Solveyra)