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Kid Custody Agreement and Taxes

A child custody agreement can have critical implications on your tax filing and your taxes overall. This concern must be addressed with your attorney or with your accountant although you are going through the process of negotiating or litigating child custody or a divorce agreement. Waiting till right after you have finalized a child custody agreement to investigate the tax impact is not adviseable.

State law on youngster custody does not dictate who gets the tax deductions. If your child custody agreement is entirely silent on this issue, the parent with main residential or sole custody will have all of the tax positive aspects obtainable via the young children. That party will be in a position to claim the kids as deductions, and so forth. This can be a important issue. There are parents who basically assume that if they are paying thousands of dollars per year in assistance, they will be able to take the youngsters as deductions. Not so. This is incredibly crucial when you take into account that all youngster help payments are not tax deductible to the payor and they are not taxable to the recipient parent.

Thus, when negotiating your child cusody agreement, you need to address the concern of how custody will be structured and who will recieve the tax rewards. This negotiation must be a portion of an general economic scheme that encompasses a consideration of all troubles, such as kid 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 essential to your general tax scheme. You can claim head of household if you have your youngsters for more than 50% of the time. Thus, a head of household tax filing must be a element of the overall negiating outline in a divorce or separation scenario. A child custody agreement that is silent on this concern is truly not a nicely negotiated or written agreement.

Your kid custody agreement can address this concern in a quantity of techniques. If your kid custody agreement provides for joint shared custody, it need to state who has the youngsters for 50% of the time. If you have two kids, you can divide that up so that every single parent has the possibility of fiing for head of household. If you just have joint custody and 1 parent has residential custody, you can nevertheless supply 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 advantages accessible to parents that have to be regarded as when negotiating a child custody agreement. Several or most of those tax benefits are variable depending upon your income level ad whether or not you can claim the youngster or children as deductions. If you are actually thinking by means of your youngster custody agreement, you will negotiate all of these benefits. The objective ought to be to maximize all obtainable benefits for both parties, thereby delivering an overall highly advantageous tax impact for your

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