Tag Archives: spousal maintenance

Tax Reform Bill Would End Spousal Support DeductionThe proposed tax reform bill in the U.S. House of Representatives has caught the attention of divorce attorneys. The bill would eliminate the federal tax deduction for spousal maintenance as part of an effort to offset massive tax cuts. Recipient spouses would also no longer pay taxes on their maintenance payments. The changes would shift the tax burden from the recipient spouse to the paying spouse. However, the recipient spouse may find it more difficult to obtain spousal maintenance during a divorce.

Tax Deductions

Under the current federal tax law, people may deduct the entirety of spousal maintenance payments they make, as long as:

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Financial Mistakes to Avoid During Your DivorceIt is easy to think of a divorce settlement in terms of winners and losers. You may feel like you won the negotiations if you obtained most of the marital properties you wanted and secured favorable support payments. However, there is more to a divorce settlement than the initial financial totals:

  • Property ownership can come with additional expenses;
  • Some properties have more potential for growth; and
  • How support payments are structured can favor one side in terms of taxes.

You need to take a broad perspective of the financial consequences of your divorce settlement.

Pursuing Your Home

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Spouse May Be Hiding Income in Own BusinessOne challenge in negotiating a financial settlement in a divorce can be trying to figure out your spouse‚Äôs true worth, as compared to what he or she claims. Understating your income and assets gives you an unfair advantage when determining the division of marital property, child support payments and spousal maintenance. In particular, people who are self-employed or own a business are capable of artificially deflating their personal worth. Spouses may think they are savvy when they find ways to understate the value of their businesses or themselves. However, the other spouse would see it as dishonest and manipulative. You must be aware of the ways people can take advantage of their self-employment during a divorce.

Manipulating Finances

When people are self-employed or run a business, their personal and professional assets and expenses often mix. As their own boss, they have the ability to:

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Receiving Your Spousal Support in a Lump SumWhen negotiating the financial aspects of a divorce settlement, each party must consider how to support him or herself in the present and future. The division of marital properties may have the greatest current value to a spouse, but spousal support payments can help create prolonged financial security. However, parties can waive regular spousal support payments in exchange for a lump sum payment, given as either one payment or in installments. The recipient spouse reaps an immediate monetary reward, but the paying spouse often benefits more. A spouse may ultimately receive more money through continued spousal support payments than from the lump sum payment. Though lump sum spousal support agreements seem short-sighted, the recipient spouse may have a valid reason to seek immediate compensation.

Benefits

Some spouses agree to receiving a lump sum spousal support payment because they are enticed by the big payout. Others are motivated by financial or emotional factors that make sense in their situations:

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divorce, stay-at-home mom, Kane County divorce lawyersWading through the divorce process is a different experience for everyone. For some couples, the process can be rocky from start to finish, while it can be generally smooth throughout for others. A great source of tension usually stems from financial issues, which can impact other matters in the divorce, such as childrearing styles and employment circumstances for each spouse. This applies especially to the stay-at-home parent, who has been accustomed to taking care of the home while their spouse earns the income. One major fear can often trigger a domino effect, resulting in multiple anxieties about the present and the future.

Common Anxieties for the Stay-at-Home Parent

Given the amount of energy that must be expended during the divorce journey, it is understandable how adding the stress of issues like parenting arrangements and the division of property can quickly become overwhelming. It is very common for the parent who has been removed from the workforce for some time to feel stretched thin, fearful of their financial future and how they will care for their family, and what the overhaul of their life will look like and feel like when all is said and done. If you are a stay-at-home parent going through a divorce and are experiencing these common anxieties, take a moment to consider the following:

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Goostree Law Group

Goostree Law Group

 555 S. Randall Road, Suite 200
St. Charles, IL 60174

 630-584-4800

 400 S. County Farm Road, Suite 300
Wheaton, IL 60187

 630-407-1777

Our Illinois divorce attorneys represent clients in Kane County, DuPage County, Kendall County and DeKalb County, including Geneva, Batavia, St.Charles, Wayne, Wasco, Elburn, Virgil, Lily Lake, Aurora, North Aurora, Elgin, South Elgin, Bartlett, Crystal Lake, Gilberts, Millcreek, Maple Park, Kaneville, LaFox, Yorkville, Oswego, Plano, Sugar Grove, Big Rock, Bristol, Newark, DeKalb, Sycamore, Naperville, Wheaton, West Chicago, Winfield, Warrenville, Downers Grove, Lombard, Oak Brook, Streamwood, Hoffman Estates, Barrington, South Barrington, Lake Barrington, Schaumburg, Big Grove, Boulder Hill, Bristol, Joliet, Kendall, Lisbon, Minooka, Montgomery, Plainfield, Sandwich, Yorkville and many other cities.

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