Kid Custody Agreement and Taxes

Sep 4, 2012 by HenscheidSouffrant445

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

State law on kid custody does not dictate who gets the tax deductions. If your youngster custody agreement is entirely silent on this issue, the parent with primary residential or sole custody will have all of the tax benefits accessible via the youngsters. That party will be in a position to claim the youngsters as deductions, and so forth. This can be a considerable issue. There are parents who merely 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 extremely critical when you contemplate that all kid help payments are not tax deductible to the payor and they are not taxable to the recipient parent.

Thus, when negotiating your kid cusody agreement, you need to address the problem of how custody will be structured and who will recieve the tax benefits. This negotiation really should be a part of an overall economic scheme that encompasses a consideration of all problems, which includes kid custody, kid help, property, alimony, and tax impact.

The capability to claim head of household rather of married filing separate or even filing single can be extremely critical to your general tax scheme. You can claim head of household if you have your kids for a lot more than 50% of the time. Thus, a head of household tax filing should be an element of the overall negiating outline in a divorce or separation scenario. A youngster custody agreement that is silent on this issue is genuinely not a well negotiated or written agreement.

Your kid custody agreement can address this problem in a number of ways. If your youngster custody agreement provides for joint shared custody, it must state who has the kids for 50% of the time. If you have two children, you can divide that up so that every single parent has the possibility of fiing for head of household. If you basically have joint custody and a single parent has residential custody, you can nevertheless provide a head of household deduction to the other parent by wording the agreement in a way that enables for that filing.

There are other tax rewards readily available to parents that have to be regarded as when negotiating a kid custody agreement. Several or most of those tax positive aspects are variable based upon your income level ad no matter whether or not you can claim the kid or youngsters as deductions. If you are truly thinking through your youngster custody agreement, you will negotiate all of these positive aspects. The objective ought to be to maximize all readily available positive aspects for both parties, thereby providing an general highly advantageous tax impact for your

kid custody agreement.

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