A child custody agreement can have serious 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 this issue, the parent with primary residential or sole custody will have all of the tax benefits available through the children. That party will be able to claim the children as deductions, and so forth. This can be a significant 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 children as deductions. Not so. This is incredibly important when you consider that all child support payments are not tax deductible to the payor and they are not taxable to the recipient parent.
Thus, when negotiating your 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 important to your overall tax scheme. You can claim head of household if you have your children 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 that is silent on this issue is really not a well negotiated or written agreement.
Your child custody agreement can address this issue in a number of ways. If your child custody agreement provides for joint shared custody, it must state who has the children for 50% of the time. If you have two children, you can divide that up so that each parent has the possibility 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 children as deductions. If you are really thinking through your child custody agreement, you will negotiate all of these benefits. The objective should be to maximize all available benefits for both parties, thereby providing an overall highly advantageous tax impact for your child custody agreement.
It is very often the case after a divorce that children end up with one parent almost by default. The reason for this is that the parties to the divorce are often so consumed by the whole process of ending their marriage that the really important work of looking out for the welfare of the kids fall by the wayside. The purpose of this article is to help you to prevent this from happening by reminding you of the importance of approaching child custody agreements with a solid strategy in place.
It is obviously much easier to sort out the best possible child custody agreement at the outset than to try and remedy past mistakes. You should therefore try to make very sure that you approach the custody situation of your kids in a calm, deliberate and proactive manner. It is so easy to allow yourself to become overwhelmed by the emotional impact of a breakup and to therefore approach custody agreements as if you are going to war! The thing is that even if you see things in warlike terms you still need to keep in mind that the one thing that is most important for those operating at the highest levels in the military can be summed up in one word: Strategy!
Strategy can be defined as a well thought out set of plans and/or procedures that you will follow to achieve a certain goal. It also involves the study of certain variables and likely responses to them. It is the kind of thing that needs to be approached with clear thinking and with a cool head. It goes without saying that just going in 'with all guns blazing' does not normally qualify as a 'good strategy'!
You owe it to yourself, and most of all to your kids, to have a good long think about ways in which their best interests can be served. You should also do everything that you can to familiarize yourself with the world of child custody agreements and with tactics and techniques that can form part of your overall strategy.
Most of us are perhaps not natural strategic thinkers but it is a skill that you will need to develop in order to achieve the best possible child custody agreements. I would therefore encourage you to, if you are facing child custody issues, do everything that you can to approach this difficult phase of your life in the same way that a master strategist thinks about meeting a certain objective: Research, Analyze, Weigh Alternatives, Anticipate Responses, Decide, Act!
Both John Pawlett & Arthur Turner are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
John Pawlett has sinced written about articles on various topics from Mobile Phone Reviews, Home Based Business and Facelift Before and After. Uk divorce law is an informative website that looks into all aspects of divorce law, from money and house sharing all through to children laws.To find out more visit