When Illinois couples end their marriage, it is important that they are aware of the impact that it will have on their taxes. Getting divorced means that the manner in which people file their tax returns will change.
They will need to change their filing statuses. If they don't have children, they will need to file as single. If they do have children, they may be able to file with the head of household status if they are eligible. Filing as head of household gives the taxpayers a higher standard deduction.
After a divorce, people who share children should be aware of the rules regarding claiming their dependents. Only one parent may claim the deduction. The IRS gives this right to the custodial parent. If the divorce orders state that the noncustodial parent is able to claim a child, then the parents will need to sign a Form 8332 and submit it with the noncustodial parent's tax return. People who pay alimony are able to deduct it on their tax returns, and those who receive it must report it as income and pay income taxes on it.
The end of a marriage requires the resolution of many family legal issues. People who wish to divorce may benefit by getting help from experienced family law attorneys. Attorneys may help their clients to untangle their finances and to negotiate the division of their property in a manner that protects their interests. They may also advise their clients about the potential tax implications of various types of property divisions. In many cases, they are able to negotiate full agreements on their clients' behalf without engaging in prolonged litigation.