Tax Considerations to Keep in Mind During Your Illinois Divorce

 Posted on September 29, 2020 in Divorce

If you are going through something as complex and stressful as a divorce, there are so many issues you must come to an agreement with your spouse to settle, such as how you will divide your property, what your parenting time schedule will look like, and whether or not you will receive spousal support. Something like your tax obligation to the government is likely not even an item that is on your list of concerns, but it is something that should be on your radar. There are certain things that you should be aware of before you go to file your taxes for the first time after your divorce.

Which Status Should You Use?

When you are married, you have the option of filing your income tax returns jointly or separately, though the vast majority of couples who can file jointly do so. The filing status that you use depends on when your divorce was finalized. If your divorce was finalized on or before December 31, then you are considered to have been unmarried for the entire year and you cannot file a joint tax return. However, if your divorce extended into the next year, you were considered to be married for the entire tax year.

Updating Your Withholding

Once your divorce is finalized, you will also have to update the number of withholdings taken from your paychecks. This is done by filling out a new form W-4 and giving it to your employer. A W-4 is the IRS form that informs your employer how much money to withhold from your paycheck every week for taxes. When you are married, you are able to have more money withheld than if you are single, so it is important that you update your W-4 as soon as possible so you do not owe money.

Claiming Your Children as Dependents

Another tax consideration you will have to settle is how you and your spouse will claim your children as dependents on your tax returns. Your children can only be claimed one time each, meaning both you and your spouse cannot claim the same child the same year. You will need to come to an agreement with your spouse as to who will claim the children and how any tax refunds are honored. If you and your spouse are unable to come to a decision on who gets to claim your kids, the IRS states that the rule of thumb is to default to the parent who has the majority of parenting time.

Contact an Aurora Divorce Attorney Today

If you are like most people, doing your taxes is a task that you begrudgingly do during the first few months of each new year, before they are due on April 15. If you are going through a divorce or you are unsure of any of the tax filing information that you should be using, it is important to speak with a knowledgeable Kane County divorce lawyer. At the Law Office of Matthew M. Williams, P.C., we have been helping clients successfully navigate their divorces for nearly 15 years. To schedule a consultation, call our office today at 630-409-8184.

Sources:

https://www.ilga.gov/legislation/ilcs/ilcs5.asp?ActID=2086&ChapterID=59

https://turbotax.intuit.com/tax-tips/marriage/getting-divorced/L20NC66cf

https://www.thebalance.com/what-divorced-or-separated-means-for-taxes-4125740

https://www.creditkarma.com/tax/i/married-filing-separately