[slider]Family law is governed by the laws of the state, as a general rule, but there are some occasions where federal law applies. In Illinois, family law lawyers usually turn to the Illinois Marriage and Dissolution of Marriage Act for guidance. One exception is in the Federal Tax Code, which normally allowed for tax deductions for alimony payments, but it appears that will soon change. Congress has passed a comprehensive tax reform bill that will have major consequences to certain divorce cases. Maintenance cases, formerly known as alimony, in Illinois will be affected by the tax bill approved on Capitol Hill. Rockford divorce lawyers know alimony calculations can be a deciding factor in negotiations in settling divorce cases.
Tax Deductions for Spousal Support
The new rules no longer allow deductions for people who pay maintenance, starting after December 31, 2018, in Illinois as well as in other states. Some critics argue that, without the tax benefits afforded to women and men paying maintenance, there will be less money to go around. Eliminating the tax deduction for maintenance could take away the incentive and may even cause you to fall into a different tax bracket, arguably making for longer divorces that are harder to resolve by settlement. This is the view of the American Academy of Matrimonial Lawyers.
“Alimony is an essential tool that has enabled countless spouses to adjust to a dramatically altered economic reality,” Madeline Marzano-Lesnevich, president of the academy, said in a statement. “The financial security provided to families by spousal support is a valuable resource that needs to be further strengthened and not diminished by our representatives.”
Tax Consequences of Divorce
Make sure that you know the tax consequences of spousal support, before you agree to any specific figures for payment. At least in Winnebago County, divorce attorneys will not volunteer this information if they represent your ex.
In Illinois or Wisconsin, the team at Pro Legal Care LLC can help you determine your best plan of action as you proceed with your divorce. For a free initial consultation, call our office today at (815) 200-8802 or schedule online today.