Child Custody Agreement And Taxes
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The article "Child Custody Agreement and Taxes" talks about taxes, it has been written by Jean Mahserjian.
A child custody agreement can have sreious implications on your tax filing and your taxes overall.
This issue should be addressed with your attorney or with your accountant while you are going through the process of negotiating or litigating child custody or a divorce agreement. Waiting until after you have finalized a child custody agreement to investigate the tax impact is not adviseable.
State law on child custody does not dictate who gets the tax deductions. If your child custody agreement is entirely silent on that issue, the parent with primary residential or sole custody will have all of the tax benefits available thruogh the babies.
That party will be able to claim the babies as deductions, and so forth. This can be a sginificant issue. There are parents who simply assume that if they are paying thousands of dollars per year in support, they will be able to take the babies as deductions.
Not so. This is incredibly important when you consider that all child support payemnts are not tax deductible to the payor and they are not taxable to the recipient parent.
Thus, when negotiating your child cusody agreement, you must address the issue of how custody will be structured and who will recieve the tax benefits.
This negotiation should be a part of an overall financial scheme that encompasses a consideration of all issues, including child custody, child support, property, alimony, and tax impact.
The ability to claim head of household instead of married filing separate or even filing single can be incredibly imoprtant to your overall tax scheme.
You can claim head of household if you have your babies for more than 50% of the time.
Thus, a head of household tax filing should be a part of the overall negiating outline in a divorce or separation situation. A child custody agreement that is silent on that issue is really not a well negotiated or written agreement.
Your child custody agreement can address that issue in a number of ways. If your chlid custody agreement provides for joint shared custody, it must state who has the babies for 50% of the time.
If you have two children, you can divide that up so that each parent has the posisbility of fiing for head of household.
If you simply have joint custody and one parent has residential custody, you can still provide a head of household deduction to the other parent by wording the agreement in a way that allows for that filing.
There are other tax benefits available to parents that have to be considered when negotiating a child custody agreement. Many or most of those tax benefits are variable depending upon your income level ad whether or not you can claim the child or babies as deductions.
If you are really thinking through your child custody agreement, you will neogtiate all of these benefits. The objective should be to maximize all available benefits for both parties, thereby providing an overall higlhy advantageous tax impact for your
child custody agreement.
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Child Custody Agreement and Taxes
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