Tax Implications Attorney Schaumburg, IL

Tax Implications AttorneyTax Implication of Divorce

After the marriage, couples generally benefit from a favored tax status, allowing them to file jointly and enjoy a lower tax rate and greater tax deductions. If you are going through a divorce or thinking of dissolving your marriage, it is important for you to know about the tax consequences you may face. Dealing with your taxes can be quite problematic if you are in the midst of a divorce, and the entire process becomes more complicated when they are of complex nature.

At the Law Office of Fedor Kozlov, P.C., our attorneys have a thorough understanding of the tax implications associated with a divorce. With our exhaustive experience and in-depth knowledge of Illinois tax laws, we can provide you with reliable counsel and devise the best strategies in order to minimize the tax impact during the divorce proceedings and after it has been finalized. Moreover, we factor tax strategies into settlement negotiations and make sure your interests are protected.

Common Tax Issues in a Divorce

Taxes affect several decisions made when negotiating a divorce settlement. The attorneys at the Law Office of Fedor Kozlov, P.C., are capable of handling all sorts of tax issues arising during divorce settlements, including:

  • Alimony/Maintenance: Alimony payments decided by the court are tax-deductible for the payer and taxable for the recipient.
  • Child Custody: For the payer spouse, child support is not tax-deductible, and is not taxed on the recipient. The custodial parent may receive several benefits including the Child and Dependent Care Credit and the Child Tax Credit.
  • Property Division: In most cases, property transfers during a divorce do not have any tax liability. However, if an asset is sold, taxes will be applied on the capital gained. For example, you may have to pay capital gains taxes if you sell your marital home.
  • Stock Options: The tax liability of stock options is a complex area and depends on whether they are qualified. Our attorneys will assist you in understanding the impact of taxes on stock options will have on your divorce settlement.
  • Retirement Accounts: The IRS has special rules for splitting retirement accounts, such as pensions, IRAs, and 401(l)s, in a divorce. You are likely to face significant taxes and penalties if you cash out your accounts.
  • Filing Status: Your tax filing status may be significantly affected depending on the time of the year. If your divorce has been finalized at the end of the year, you will have to file as either the head of the household or single. If the court has not yet approved your divorce decree by that time, you have the option to file as married or married filing separately.

Talk to an Experienced Divorce Tax Implication Attorney Today

Divorce can give rise to several confusing questions regarding the impact of tax on different settlement matters. Whether you want to know about the tax implications of property division or your rights for a dependency exemption, our reliable attorneys can provide skilled counsel to help you make informed decisions. Contact the Law Office of Fedor Kozlov, P.C. today at (847) 241-1299 to schedule a consultation with one of our experienced attorneys and discuss your case.

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