Your Divorce & the TCJA
If you and your spouse are seriously considering a divorce, there may beno time like the present to file your petition and complete the process.As 2018 crawls to a close, we are getting closer and closer to the lasttax season that provides certain tax benefits to divorced couples.
The Trump Administration passed the Tax Cuts and Jobs Act (TCJA) in December2017, and the legislative changes will finally go into effect on December31, 2018. The TCJA is making significant changes to the individual incometax, and these changes include reforms to alimony, dependent deductions,and the child tax credit. These are all tax issues that may affect yourpost-divorce life.
The purpose of spousal support is to provide financial aid to a lower-earningspouse who may find it difficult to live on a single income after a divorce.Before the TCJA, alimony payments were tax deductible for the paying spouseand judged as taxable income for the receiving spouse. In 2019, this standardwill no longer apply to any new spousal support orders or alimony modifications.Depending on your personal circumstances, this may be one positive changeincluded in this sweeping tax reform.
Dependent Exemption Deductions
Under the TCJA, parents can no longer claim eligible children as dependentson their tax returns; in fact, all personal and dependent deductions areeffectively eliminated under the new act.
Child Tax Credit
While dependent exemption deductions are flatlining to $0, the child taxcredit is doubling to $2,000. This dollar-for-dollar reduction is typicallynegotiated during the divorce process and is an important tax credit forcustodial and noncustodial parents. As a bonus, $1,400 of this tax creditis potentially refundable. A noncustodial parent is eligible to receivethis benefit so long as the custodial parent is willing to sign Tax Form 8332.
Learn More by Scheduling a Consultation
If you have any concerns about how the Tax Cuts and Jobs Act may affectyour divorce, contact theIllinois divorce attorneys at Wakenight & Associates, P.C. We can help you explore your legaloptions and prepare for each aspect of the divorce process. With our guidance,you can face the next chapter of your life with confidence.
We have offices in Mokena, Elmhurst, Oak Park, and Joliet! Call our Illinois divorce attorneysat any of our convenient locations to schedule your consultation.