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Child Custody Agreement and Taxes

A youngster custody agreement can have serious implications on your tax filing and your taxes overall. This problem must be addressed with your lawyer or with your accountant while you are going by means of the procedure of negotiating or litigating kid custody or a divorce agreement. Waiting until immediately 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 kid custody agreement is entirely silent on this problem, the parent with main residential or sole custody will have all of the tax benefits accessible by means of the children. That party will be able to claim the kids as deductions, and so forth. This can be a significant issue. There are parents who basically assume that if they are paying thousands of dollars per year in support, they will be in a position to take the youngsters as deductions. Not so. This is incredibly important when you take into account that all youngster support payments are not tax deductible to the payor and they are not taxable to the recipient parent.

Therefore, when negotiating your child cusody agreement, you must address the issue of how custody will be structured and who will recieve the tax advantages. This negotiation need to be a element of an overall economic scheme that encompasses a consideration of all problems, including kid custody, child help, property, alimony, and tax impact.

The potential to claim head of household instead of married filing separate or even filing single can be extremely crucial to your general tax scheme. You can claim head of household if you have your kids for much more than 50% of the time. Therefore, a head of household tax filing should be a part of the overall negiating outline in a divorce or separation circumstance. A kid custody agreement that is silent on this issue is genuinely not a well negotiated or written agreement.

Your child custody agreement can address this concern in a quantity of ways. If your child custody agreement offers for joint shared custody, it should state who has the kids for 50% of the time. If you have two youngsters, you can divide that up so that each and every parent has the possibility of fiing for head of household. If you simply have joint custody and one particular parent has residential custody, you can nevertheless give a head of household deduction to the other parent by wording the agreement in a way that makes it possible for for that filing.

There are other tax benefits obtainable to parents that have to be regarded as when negotiating a child custody agreement. Several or most of those tax positive aspects are variable depending upon your income level ad whether or not or not you can claim the kid or young children as deductions. If you are really thinking by means of your kid custody agreement, you will negotiate all of these rewards. The objective should be to maximize all readily available rewards for both parties, thereby providing an overall extremely advantageous tax impact for your

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