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4Getting a divorce can be one of the most difficult things you will have to do in your life. Not only will you have to deal with the emotional fallout from this major life change, but you also have a slew of financial and legal issues to reconcile. Some of these issues are things that you may already have on your radar, such as spousal support or how you will divide savings accounts. Other issues that need to be dealt with may not be as prominent, but important nonetheless. Have you thought about what you will do with your retirement accounts? Do you know if receiving or paying spousal support will be worth it come tax time? These are the questions that a financial advisor can help you with.

What Is the Role of a Financial Advisor?

Many people think that the only professional they need during a divorce is a lawyer. While it is important that you and your spouse each have your own attorneys, it does not hurt to hire a financial advisor too. A financial advisor’s job is to look at your financial situation and advise you of your options when it comes to finance-related decisions during your divorce. Much like an attorney gives you legal advice based on your situation, a financial advisor will give you your best financial options during your divorce.

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tax issues during divorce, Elmhurst Divorce LawyerAs income tax day nears, those in the divorce process, or those who have recently finalized a divorce, will likely have questions about what changes must be made to their tax returns this year.

Filing Status

Your marital status as of December 31 of the tax year determines your filing status for the whole year. Said another way, the tax year in which your divorce decree is final is the year you can file as single.

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taxes and high asset divorce, Elmhurst divorce lawyersAlthough all divorces are bound by the same laws under the Illinois Marriage and Dissolution of Marriage Act (IMDMA), those with a high net worth divorce often experience an added layer of complexity. This can be especially true in regards to tax implications, which can financially wipe out both parties if they are not careful. Learn what you need to know about tax implications in your high asset divorce and how you can protect yourself in the months to come.

Financial Support: Alimony vs. Child Support

Oftentimes, high asset divorces result in an alimony (or spousal maintenance) payment for lesser-earning or earning-impaired spouses. Those with children may also receive child support payments. Both are forms of financial support, but each works differently under tax laws. Whereas child support is not taxed or taxable, alimony payments are the opposite. It is important that you understand these differences and how they may impact your finances.

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