Every year, you have to file your taxes, and if you pay or receive alimony in Illinois, you may be wondering how you report it to the IRS. The short answer is that you must report it, but the IRS may define alimony a bit differently than you or the courts. At Lois Kulinsky & Associates, Ltd., we understand that this can be a little difficult to understand. However, it is essential to make sure you are clear on how to report alimony on your taxes.
Bankruptcy and divorce often go hand in hand in Illinois. At Lois Kulinsky & Associates, LTD., we understand that debt is common in a divorce situation. Every situation is unique and bankruptcy laws are firm, so it is important to know what you may face when filing whether it is before or after a divorce.
Illinois has a law that sets standards for alimony, making it much easier for your attorney to determine if you will have to pay alimony, and how much you may have to pay if you are ordered to do so. The Illinois Bar Association explains there is a formula that judges are encouraged to use to determine their rulings for spousal support.
Alimony, also called spousal support in Illinois, is where you are ordered to pay financial support to your ex-spouse as part of your divorce settlement. Traditionally, wives received the alimony and husbands paid it. However, as you are probably already aware, times have changed; women have entered the workforce in growing numbers and in many cases are making more money than their spouse. If you are in the process of getting a divorce and your wife is the primary breadwinner, you should know that more and more judges are awarding alimony to husbands. This is what is called alimony role reversal.
Alimony is often granted in divorce cases as a way to compensate the spouse who earns the lowest wages. It is considered a form of support, which is why in Illinois it is now referred to as spousal support instead of alimony. The idea is to help ensure a continuation in the standard of living that was enjoyed during the marriage.
If a divorce is looming in your future or perhaps already even underway, the possibility of you being ordered to pay or to receive spousal support may well come to be. Many Illinois residents who get a divorce find that alimony is part of their final divorce decree. This is a legal obligation just like child support and can be beneficial to a lesser-earning spouse.
Alimony payments can be difficult to deal with and keep track of. Many consider it extra stress that is added on top of an already stressful divorce situation. However, it is still an important part of divorce and deserves attention and understanding.
Even the most amicable divorce in Illinois can be emotionally draining and take a long time to finalize. Once the final paperwork has been signed and all documents have been approved by the court, most spouses are logically pleased to be what they consider done with the divorce issues and process. In some cases, this can happen but there are times when situations require further changes or assistance with a divorce decree. An alimony modification, for example, can be one thing you or your former spouse may seek.
Depending on the specific circumstances of your divorce case, an Illinois family law judge may have awarded spousal support for you or your ex spouse. Alimony arrangements are generally made in order to account for the financial needs of both divorcing parties. That does not necessarily mean, though, that they are permanent or unchangeable.
Many people practice alternative dispute resolution when trying to solve a family matter. If you are hoping to avoid litigation in Illinois, you may opt for a collaborative divorce. According to the Illinois State Bar Association, collaborative law is a new method and has become popular among couples wishing to work together in a respectful and honest manner.