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Rockford Illinois Law Blog

TCJA to impact alimony, child support taxes

After being passed into law in December 2017, the Tax Cuts and Jobs Act eliminated a number of deductions and exemptions, raised the Alternative Minimum Tax limit and reduced federal rates of taxation. Furthermore, this tax reform will affect the way child support and alimony are treated for Illinois residents. The TCJA gets rid of both dependent and personal exemptions and raises the standard deductions.

A parent who is newly single may have more incentive to claim the Head of Household status under the TCJA. In order to claim Head of Household, the person must be unmarried, have a dependent living in the household greater than 50 percent of the time and be responsible for more than 50 percent of the expenses of the household. After a divorce, the parent who is the Head of Household can claim the Child Tax Credit of up to $2,000 per qualifying child.

Can you succeed in commercial real estate these days?

Investing in commercial real estate has the potential to be a rewarding and satisfying venture. Many in Illinois and beyond purchase commercial property as a second source of income, a retirement plan or even as the sole means of financial support. With the proper management, you can do well in this industry.

Unfortunately, everything changes, and even the face of retail is undergoing a vast transformation. If you own storefront property or other retail or office space, you may be concerned about the recent trends. More brick and mortar stores are closing, and shoppers are preferring to do their business online. You may wonder how you can keep your property lucrative in such a market.

The link between divorce and health issues

Getting a divorce takes the number two spot on the Holmes-Rahe Stress Inventory. This tool measures how likely someone in Illinois or elsewhere will experience health problems related to stress within two years of an incident taking place. While divorce can be stressful for anyone, it may take an especially difficult toll on those who are 50 or older. Studying these issues can be important as the divorce rate for this age group has doubled since 1990.

Researchers from Bowling Green University point to several factors for the increase in divorce among older people. One of those factors is that people are living longer than they used to. As women increasingly enter the workforce, they are less reliant financially on their spouses. Those who have been divorced and remarried are 2.5 times more likely to get divorced again. Among the health issues most common among older adults who divorce is depression.

"Gray divorce" on the rise

In Illinois and across the country, a growing number of older Americans is choosing to divorce. These statistics are part of a social trend that has been increasing over the decades, and the growth in baby boomer divorces is now being referred to as a "gray divorce revolution." Since 1990, the divorce rate for Americans aged 50 and older has doubled. At the same time, the divorce rate for people aged 65 and older has tripled. Divorce is more socially acceptable and familiar to people, but there is a number of specific factors that may affect a particular couple's decision to separate.

In general, family experience with divorce can correlate with an increased likelihood of a legal split. For example, the daughters of parents who divorced are 60 percent more likely to end their own marriages, and the sons of divorced parents are 35 percent more likely to do the same. In addition, people of any age who have divorced in the past are more likely to do it again. Therefore, people who are on their second or third marriages are 2.5 times more likely to divorce than those who are still involved in their first marriages.

The hidden costs of debt forgiveness

Illinois residents who are struggling to pay their bills sometimes seek relief by pursuing debt forgiveness, but they often find the terms offered by credit card companies or debt collectors very difficult to meet. Lenders and collection agencies are primarily interested in recovering as much of the outstanding balance as possible, and any concessions they make are designed to provide either temporary relief only or secure the largest lump sum payment possible.

Credit card companies generally sell debts to collection agencies for a fraction of their original amounts when payments have not been received for several months. These collection agencies may then offer to forgive part of the debt in return for a lump sum payment. However, this forgiven debt will still appear on credit reports as a negative item and, in many cases, the IRS will treat the forgiven amount as income and expect taxes to be paid on it. This option also assumes that individuals who have been unable to pay their bills for prolonged periods are able to gather together the money needed to settle their debt.

Studies reveal that many older Americans have money troubles

A recent study suggests that a worryingly high number of senior citizens in Illinois and around the country are struggling to cope with unmanageable financial situations, and spiraling medical debt is often to blame. Bankruptcy filings among Americans 75 years of age or older increased by 300 percent between 1991 and 2016 according to figures from the Consumer Bankruptcy Projects, and Chapter 7 or Chapter 13 petitions made by individuals between the ages of 65 and 74 more than doubled.

Americans of retirement age now account for one in seven personal bankruptcy filings. Experts say that this figure has grown by about 500 percent in less than 30 years as the baby boom generation began leaving the workforce in larger numbers. This is a concern for experts and lawmakers because almost one in four Americans will be of retirement age by 2050. The CBP report, which was based on a survey of 895 personal bankruptcy filers, was published by the Social Science Research Network in July 2018.

Are you afraid of power of attorney abuse?

As you considered your estate plan, you may have already had an idea of details you wanted to include in your will. After all, you may have believed that your will would act as the most important part of your plan. However, your estate plan can address many different aspects of your life, including events that could take place while you are still alive.

In particular, you can use your plan to address how you want your care handled if you suffer from an incapacitating event, and you can also use a power of attorney document to appoint someone to act on your behalf when it comes to your finances. Of course, this agent would have a considerable amount of power over your affairs, and you may worry about possible abuses.

Can joint custody affect child support?

When parents share legal and physical custody of their children after a divorce or separation, this is generally referred to as joint custody. As more Illinois families are composed of two working parents and their children, joint custody has become an increasingly popular solution. According to a joint custody plan, both parents should share the financial responsibility for raising their children as well as the physical effort of doing so. This may make parents wonder about the impact that joint custody could have on a child support order.

Child support payments are generally based on a state formula that takes several factors into account, including income and the number of children that each parent has. Traditionally, child support is a financial contribution by a non-custodial parent to the custodial parent who bears the majority of the physical and financial aspects of child-rearing. However, joint custody agreements do not necessarily mean that child support obligations are eliminated; the relationship between child support and joint custody varies depending on the individual family situation.

Automatic stays and emotional distress damages

Illinois residents who file for personal bankruptcy may be able to obtain actual and punitive damages if they are harmed by the purposeful violation of the automatic stay that is set in place when bankruptcy is filed. However, there is a question whether the actual damages they receive should include damages for emotional distress.

The courts have determined that the intent of the automatic stay in the bankruptcy process is to allow the debtors to have a period in which the collections efforts against them are ceased and to stop harassment. The stay is also meant to provide debtors relief from the financial stresses that brought them to bankruptcy.

Business owners should focus on revenue generation

New business owners in Illinois often make some common mistakes. They might focus too much on trying to make everything perfect while failing to pay attention to driving sales. If they do not work to build and maintain their sales momentum, the businesses will likely fail.

Regardless of whether businesses sell services or products, they should work on generating sales every day. Businesses that haven't started producing the products that they will sell are still able to take deposits and place orders. Those that are selling services should work to book clients even if they aren't quite ready.

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Rockford, IL 61108

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