Dependency Exemption for Taxes: Are you maximizing your tax refund?

It’s that time of year, again: time to file your taxes. Are  you looking to get as much of a refund back as possible? One of the most desirable exemptions is the dependency exemption. Parents are entitled to a dependency exemption for each child they support. However, if you are divorced or filing separate from the other parent, only one parent can use the exemption.  (See IRS Publication 504 Divorced or Separated Individuals for use in preparing 2015 Tax Returns.)

Taxes, dependency exemption, divorce, family law

IRS RULES

The General Rule – The custodial parent gets the entire dependency exemption.

A dependent is either:

  1. Your child or a relative,
  2. Who meets a set of tests.

The IRS defines custodial parent as:

  1. The parent with whom the child lived for the greater number of nights in 2015; or
  2. If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income.  (See IRS Publication 503 Child and Dependent Care Expenses.

COURT ORDERED DEPENDENCY EXEMPTION

Sometimes it makes sense to allow the noncustodial parent claim the exemption. For example, if the custodial parent is unemployed or makes little income, it would make sense to allow the non-custodial parent to use the dependency exemption to get a bigger tax return.

Parents can agree between themselves who gets the exemption, or the court can order who gets the dependency exemption each year. It is common for divorced or separated parents to negotiate who can take the exemption. If there are two children, each parent might each claim one dependent. If there is one child, the parents might alternate the exemption. If the non-custodial parent does not contribute at least 50% to the dependent’s expenses, it is less likely that the non-custodial parent will get the exemption. If there is a child support arrearage, it is also common to not allow the exemption.

COURT ORDERS vs. IRS

Although a court order allowing the non-custodial parent to take the exemption is enforceable through the state court, it has no bearing on the IRS. The custodial parent needs to release the exemption by signing an IRS Form 8332 Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent or similar statement. The custodial parent becomes the “non-custodial parent” for tax purposes and cannot claim the exemption that year. The noncustodial parent becomes the “custodial parent” for tax purposes and must attach the Form 8332 or the statement to his or her return.

If the noncustodial parent has a child support arrearage at the end of the year, the custodial parent can revoke the Form 8332 release with the IRS. Whether that is allowed by the court depends on your court order. The custodial parent can use Part III of Form 8332 for this purpose and must attach a copy of the revocation to his or her return for each tax year he or she claims the child as a dependent as a result of the revocation. The custodial parent must also give (or make reasonable efforts to give) written notice of the revocation to the noncustodial parent.

NEED HELP?

Did you finalize your divorce or parenting judgment and neglect to cover who gets to claim the dependency exemption? Has there been a substantial change in circumstances that might entitle you to claim the dependency exemption? Were you entitled to claim the dependency exemption but the other parent claimed it?

We offer FREE initial consultations to discuss your claims and see how we can help resolve your matters as quickly and painlessly as possible.

02. February 2016 by Kelly Thames
Categories: Chicago Family Law Group, Child Support, dependency exemption, Divorce, In the Courtroom, Modification & Enforcement, taxes, Uncategorized | Leave a comment

9 Most Important Changes to Illinois Divorce/Child Custody Law in 2016

Vintage Baby New Year

Every year there are varying changes and usually ‘smallish’ changes to the laws that govern our fields of work, namely divorce and parenting rights/responsibilities cases. That’s what the legislators in Springfield do. However, effective January 1, 2016 the changes aren’t smallish in 2016; both of the laws that govern much of what I do on a daily basis:  Illinois Marriage and Dissolution of Marriage Act and Illinois Parentage Act have been 100% rewritten from scratch. So unlike most years where a small handful of sections of a law are amended this year the entire framework and terminology governing EVERYTHING is new.

***As an aside, these massive changes are among the reasons why you cannot trust your legal representation to an attorney who isn’t focused on family law. Attorneys who dabble in multiple areas of law have always been bad to work with as an opposing lawyer and bad for there clients but the new law simply makes in MANDATORY that you not trust you and your children’s lives to a non-specialist. We at the Chicago Family Law Group, LLC practice only family law.

Without further ado, the 9 MOST IMPORTANT changes to Illinois Divorce/Child Custody law in 2016:

  1. All Divorces are ‘no fault’ & No Waiting Period. Previously there was 2-year separation requirement that could be shortened to 6-months when pursuing a ‘no fault’ divorce. Now simple, uncontested divorces can be completed in 2-weeks.
  2. Child Custody and Visitation are No More. Now parenting disputes will involve dividing “Parental Responsibilities” and “Parenting Time.” In substance these are just word changes because “custody” always meant decision-making responsibilities and “visitation” always meant parenting time but over time the words custody/visitation clearly began to have baggage associated with them where clear winners and losers were created. This change will defray and eliminate a lot of useless court fights that previously existed only because someone was worried about losing custody.
  3. Geographic Relocation of Kids. Formerly a sole or residential custodial parent had to get a Court’s approval to move out-of-Illinois. As of 2016, a parent who has at least 50% of the court-ordered parenting time must get a Court’s approval to relocate 25 miles (Chicagoland) or 50 miles (Illinois beyond the 6 “Collar Counties”) with a child or children. I like that relocation is now tied to mileage rather than state boundaries I personally just feel like 25 miles is a pretty small circle and would have preferred 50/75 miles for everyone. I could see this promoting more court fights.
  4. Student Loan Payments Now a Specific Deduction for Child Support. This change actually might be the #1 reason to bring your case back into court immediately if you’re re-paying a significant student loan obligation because now it’s nearly assured that your “Net Income” which child support is based on must be reduced by the student loan repayment obligation in the same way as say federal or state taxes. So if you have a student loan obligation of say $300 per month or more you should call us now @ 312-893-5888.
  5. Affirmative Obligation to Report New Job or Job Termination to Other Parent. This should help people get the child support that they’re entitled to. In the past it was pretty easy for a parent to hide a new job if they covered their tracks and I feel like oftentimes this information could only be discovered if a parent were careless on social media. The new law allows that a person can be held in contempt of court for not reporting the job change plus I would surely expect that child support will be made retroactive to a new job’s income if it’s not reported to the other parent.
  6. “C” Average and Age 23 Limits on College Expenses. Previously college contribution ended when a student obtained a bachelor’s degree so adding a requisite grade point average and age limit surely tightens things up for the kids and may be a way to stop your contribution if your child isn’t meeting these new criteria.
  7. Financial Deception Penalties. It’s not new that parties’ in family law matters must prepare a financial affidavit that sets forth information about their income and assets that can serve as the basis for things like child support, spousal support, and attorney fee contributions. What is new is that the law now provides that parties’ can be punished if these aren’t prepared accurately with likely punishments being financial sanctions and attorney fee awards.
  8. Fixed Term Spousal Support for Less than 10-year Marriages. Previously I regularly saw maintenance “reviewed” for many, many years in short-term marriages with the result being no certainty on this obligation and little incentive for the recipient former spouse to become self-supporting. Now if you are ordered to pay spousal support post-divorce it can at least be made clear/certain as to the time and amount rather than an unpredictable obligation.
  9. Pre-Birth Voluntary Acknowledgement of Paternity. One of the ways that a father establishes himself as the legal father is through an administrative procedure that includes signing/witnessing a Voluntary Acknowledgement of Paternity. If there’s 100% certainty this is something to consider especially in situations where you might be worried about one of the parents relocating or withholding your child from you after he/she is born.

 

09. January 2016 by Peter Olson
Categories: Chicago Family Law Group, Child Custody, Child Support, Divorce, Paternity, Visitation | Leave a comment

Celebrating the holidays after a divorce or separation

Broken Holidays

The holidays can be joyful times for many, but for the recently divorced or separated, they can also be painful times, especially if you are spending it alone for the first time or the kids have to split their holidays for the first time. We are not mental health professionals here at Chicago Family Law Group, LLC, and not every tip will be right for every situation, so you have to know yourself and take care of yourself. Here are some of the tips that we have collected over the years:

  1. If your friends and/or family will lift your spirits, spend time re-connecting with family and friends. If, on the other hand, the celebrations will bring you down, don’t put yourself in that situation.
  2. Focus on what you can be thankful for and count your blessings. Do you have a roof over your head, children that love you, food on your table? Make a list. Check it twice.
  3. Give back to those that have less. Donate a gift  to children or non-perishable food to a family that is in need. Donate your time at a homeless shelter or soup kitchen. Did you know that socks are one of the most needed and least donated items at homeless shelters?
  4. Ask for help or support if you need it. The holidays are the time for giving and most people will be more than happy to help out.
  5. Develop new holiday traditions. If you have children, splitting holidays is inevitable. It may be too painful to continue in the holiday traditions that you had as an intact family but you can start new traditions that reflect your new holiday arrangements.
  6. Keep active! Exercise fights depression.
  7. Eat healthy! Yes, there will be holiday treats around and you might do some indulging, but don’t make sure you balance that with some vegetables and healthy fats. Your diet can affect your mental health.
  8. There is usually a lot of alcohol at holiday gatherings. Be careful and drink responsibly. Alcohol might help you relax, but there is also a strong link between alcohol and depression.
  9. Cut out the negative self-talk. If you catch yourself doing it, challenge those thoughts with more reasonable beliefs.
  10. Try some meditation, breathing exercises, and/or do some yoga.
  11. If you need professional help, seek it out.

We wish you a joyous holiday season and peace and cheer in the New Year. If it is time to start a new chapter in your life by getting a divorce or modifying a visitation schedule, please reach out to us. If you know someone that is recently divorced or separated, keep in mind that this may be a very difficult holiday season for them and reach out and offer your support.

15. December 2015 by Kelly Thames
Categories: Chicago Family Law Group, Child Custody, Divorce, Domestic Violence, Mediation, Mental Health, Paternity, Uncategorized, Visitation | Leave a comment

Mediation – Is it for you?

Mediation in Cook County

If you are involved in a divorce case or parentage case, you may hear about mediation. In an effort to promote settling cases on the parties’ own terms rather than litigating the terms before a judge,  there are established rules that require mediation in contested pretrial matters involving custody and visitation, or in contested post-trial matters to modify a joint custody judgment.  In Cook County, mediation is governed by Rule 13.4(e) of the Rules of the Circuit Court of Cook County. Parties are required to attend mediation in cases involving disputes over custody and visitation, unless there exists a valid reason to be excused from mediation, however, parties are not required to reach an agreement.  Mediation of financial matters is available, but is not required unless the Court orders it. Financial matters include disputes over debts, assets and money. Neighboring counties have similar rules, but for the sake of brevity, this post is only in the context of Cook County rules.

There have been a significant amount of changes recently in Family Law and Mediation in Illinois. The Illinois Marriage and Dissolution of Marriage Act has been overhauled and will go into effect on January 1, 2016, which introduces many changes to how the courts will view custody and visitation issues.

IMG_0962

Where do I go for mediation?

Previously known as Marriage and Family Counseling Services,  now “Family Mediation Services” (FMS), FMS is a department of the Office of the Chief Judge, Circuit Court of Cook County, Domestic Relations Division. “FMS provides mediation for parents who are separating, separated, divorcing or divorced, who were never married, and are in conflict over custody and visitation issues involving their children.” If the judge orders you to mediation in a pretrial matter involving custody and visitation, FMS is the where you will attend mediation. Mediation can also be completed through private mediators, if that is who the parties elect to utilize for their mediation. Joint Custody Judgments often contain a paragraph where the parties should attend mediation. This could be a mediator with Center for Conflict Resolution or it could name a specific mediator. Which mediator you use is important and you should speak with your attorney to decide which mediator is appropriate for your case.

What is a mediator? Do I need an attorney?

Mediation is a non-binding confidential process by which a neutral third party assists the parties in reaching a mutually acceptable agreement. A mediator is not an attorney for both parties but a mediator may be an attorney. A mediator does not have to be an attorney. It is highly preferred by mediators that the parties are represented by attorneys prior to attending mediation. Why?  Your attorney can help you understand the law and what you are entitled to before you make any agreements. Your attorney can help you understand the best possible result that you could obtain in litigation, the worst possible result that you could obtain in litigation, and the most likely result that you could obtain in litigation. Once you are fully informed, you can be more successful in mediation. Your attorney can help you know what you don’t know.

Does my attorney participate in the mediation?

Sometimes attorneys attend mediation with their clients. These attorneys are not attending mediation to zealously advocate for their client during mediation but to support their clients as they go through the process. Some attorneys prepare their clients ahead of time and are available by phone, if needed, but don’t attend the actual mediation. If the parties reach an agreement, the attorneys can then draft the settlement and court documents.

Will mediation save me money?

Rule 13.4 explains that one of the purposes of mediation is to be “cost-saving.” Does mediation save money? Well, that depends… What does it depend on? If it works! If you use private mediators and don’t reach an agreement, you have not saved any money. If you have very few assets and use a mediator for multiple sessions, you may not save any money if two competent attorneys can wrap it up in a few emails exchanging draft agreements. But mediation can save $$$ in many cases. It’s always a good idea to talk with your attorney about whether your case is appropriate for mediation. Sometimes, it is a matter of good timing whether mediation is successful and cost-saving. This is also something to talk about with your attorney.

Why should I use mediation rather than litigation?

So I just said that cost-savings are not a guarantee. You have an attorney that can negotiate a settlement or litigate at trial. You are probably wondering why you should go to mediation.  The reason is that, overwhelmingly, the parties that reach a settlement in mediation are happier with their settlement than if they went to trial, because it was their agreement not something that the judge imposed on them. Let’s be real: there is no winning in divorce or custody battles. You can’t actually “split the baby” and have two whole babies.

What mediation can give you is your voice. The family law court systems are clogged. If you think that going to court is going to give you your voice, you may want to go observe how the courtrooms actually operate. The judge is trying to get through their “court call” as efficiently as possible and that doesn’t leave a lot of time for your to air your grievances. Court cases don’t wrap up in a few short days like they do on TV dramas.

But if you prepare for mediation with your attorney, if the timing is right for you and your Ex to mediate a settlement, and if you go into mediation ready to compromise and get the best possible settlement for both you and your Ex, you could walk out more satisfied with the results.

Is mediation right for you?

That is a question that you should consider with your lawyer. We offer free initial consultations. Call or make an appointment on our website to get started: http://www.familylawchicago.com/make-an-appointment/

10. September 2015 by Kelly Thames
Categories: Uncategorized | Leave a comment

The Ashley Madison Hack

 

They are calling it a boon to divorce attorneys.  AshleyMadison.com, an online dating website for married people to have illicit affairs has been hacked. It has been confirmed that hackers have leaked a massive amount of information, including user names, first and last names, street names and phone numbers, and 35 million email addresses, among other information.

Ashley Madison small

 

Apparently several websites have set up searchable databases to find out whether an email address was used to set up an Ashley Madison account. Undoubtedly, many of the names and addresses are likely fake and many people may use “burner” email accounts, but many internet users have a blind faith that the internet is a secure place to put personal information, a reality confirmed by the reported 15,000 email addresses hosted by US government and military servers using the .gov and .mil top-level domains.  In fact, according to many sources, the email addresses used could mean that the email owner created the account or it could mean that someone used that person’s email address to create a fake account. I imagine that a lot of curious people have set up fake accounts just to take a peek at the controversial website and have never used it to start affairs. I wonder how many divorce attorneys created accounts to see if they wanted to advertise their law firm on the site…

It is very likely that this may lead to an increase in marriages ended. At Chicago Family Law Group, LLC, we do not take ending marriage lightly. This hack will damage many lives. Many people handle extra-marital affairs privately, in their own way. Sometimes it ends up in divorce and sometimes it is dealt with through counseling or through private discussions, sometimes resulting in forgiveness and remaining together. Some couples choose to actively ignore their spouse’s extra-marital affairs, as long as it is discreet. With this public information dump, much of the privacy of dealing with infidelity has been stripped away. Co-workers, friends, and family members may learn of the affairs. Children may find out about their parent’s infidelity. Ultimately, this dump will narrow the choices a spouse normally has in how to handle the extra-marital affair, and many people will be immensely hurt by this.

If your marriage is ending, we are prepared to help you start the next chapter of your life. We offer free initial consultations.  You can book an appointment for a free initial consultation here NOW or call (312) 893-5888.

20. August 2015 by Kelly Thames
Categories: Uncategorized | Leave a comment

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