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Showing posts from April, 2018

Illinois Child Support v. Alimony

The child support component of payments is not a taxable event. If someone receives a certain amount of money in child support, they do not declare that as income nor does the party who paid the child support claim it as a deduction for either federal or state tax purposes in Illinois. Maintenance, however – spousal support is what we used to call alimony – is a taxable event. There are some little wrinkles that the IRS has set up over the years to try to make sure that if money is changing hands and being called alimony, that it really is alimony. Assuming that those fairly simple tasks are met, the person who pays it takes that amount of money as a deduction right off the bottom of the front page of their federal tax returns. It comes right off the gross income. The party who receives it, it gets treated as ordinary income, so they pay tax on it. In general, maintenance is a taxable event, child support is not. MLG LAW GROUP 79 W Monroe Suite 925 Chicago, IL. 60603 312-37

Illinois new Alimony law 2018

The new tax law will make getting divorced more expensive for maintenance payors by removing a deduction that has been in place since 1942. Not only will maintenance payors be unable to deduct the payments from their taxes, payees will not have to report the money as income.  MLG LAW GROUP 312-374-4559 www.mlglawgroupillinois.com