Although the initial tax deadline passed a month ago, many people - especially those who are recently divorced - have yet to manage their 2021 taxes because they are unsure about what to expect from the filing process after their Illinois divorce. Divorce can have significant tax implications, and although it is important to understand these before you file your taxes, it is also important not to avoid filing your taxes because you feel like you do not have all the information you need. Here is a brief overview of some of the things you will need to pay attention to on your first tax filing after you begin divorce proceedings.
Determine Your Filing Status
If your divorce was completed after December 31, 2021, you can file your 2021 taxes jointly even if your divorce has now been finalized. Filing jointly may be only one option available to you; depending on the date of your divorce, your filing status could also be married filing separately, single, or head of household. Each of these has benefits and drawbacks and which one you choose will depend on your divorce, your financial goals, and your living situation.
Claiming a Child as a Dependent
When your filing status is married filing jointly, you and your spouse can both claim your child as a dependent on your joint tax return. When you are divorced, however, only one parent can claim a child as a dependent. Experts recommend including which parent will get to claim the children in the divorce negotiations; failing to do so can cause your taxes to be rejected or even result in fines and penalties.
Capital Gains and Other Property Division Tax Issues
Marital property must be divided in an Illinois divorce. If you and your spouse owned a home for fifteen years and, as part of your property division negotiation, you sold the house and split the proceeds, you will need to pay taxes on the portion of the capital gain in the value of the home. This is true for other assets that may have increased in value, including withdrawals from retirement accounts.
Contact a Wheaton, IL Divorce Lawyer with Tax Professional Connections
Throughout the divorce process, you need to feel confident that your attorney is doing their best to help you achieve a favorable divorce decree. This includes making sure you have the resources you need to manage the other issues in your divorce, especially your finances. At Andrew Cores Family Law Group, our experienced DuPage County divorce attorneys are well connected with tax professionals and other financial experts who can help you plan carefully for the future. Call us today to schedule a complimentary initial consultation at 630-871-1002.