How Can Divorce Affect My Illinois Taxes?

 Posted on August 21, 2024 in Divorce

Even people who have not been through a divorce before are aware of many of the ways it can impact your life: whether you are splitting custody of your children, dividing your marital assets, or figuring out who will end up keeping your family home, divorce marks a significant transition. One area of life that is also impacted by divorce is taxes. This article will explain how, but if you have any further questions, feel free to contact a knowledgeable DuPage County, IL, divorce lawyer.

Divorce and Tax Filing

Something important for you to consider is your filing status. Married couples typically file their taxes together, and the timing of your divorce can impact how you should file your taxes. If you are still officially married on the last day of a tax year, the IRS will consider you as married for the entire tax year and you are legally allowed to file your tax return for the previous year together. If the divorce is final before December 31st, that is no longer an option. You will need to file separately and can do so as single or as head of household. There are pros and cons for each, depending on your specific circumstances.

Tax Considerations for Child Support, Custody, and Claiming Dependents

If you have custody over your child, this could impact your taxes as well. Parents are entitled to exemptions if they have the majority of parenting time and provide the majority of support. If that parent does not feel they need that exemption and wants the other parent to have it, they can complete an IRS form to release their claim so the other can claim it. If their circumstances change, they can use the same form to cancel a previous request to release it.

Another question is about who can claim your children as their dependents. In general, the parent that the child lives with the majority of the time can claim the child as their dependent, but some parents have other arrangements. For example, you and your spouse might agree to alternate years for claiming the child. Whatever you decide should be outlined clearly in your divorce decree to help avoid unnecessary conflicts when it is time to file your taxes.

Schedule a Free Consultation with a DuPage County, IL Divorce Lawyer

With all the changes in your life when you go through a divorce, new tax considerations can feel overwhelming. An experienced Wheaton, IL divorce attorney can arm you with the information and resources you need to help you manage this efficiently. At Davi Law Group, we are passionate about helping our clients make informed decisions for their future. Call us at 630-657-5052 to schedule a free consultation.