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Custody Agreement and Taxes
  • A son or daughter custody agreement will surely have serious implications on the tax filing and your taxes overall. This challenge should be addressed with your attorney or together with your accountant while you are experiencing the process of negotiating or litigating custody or perhaps a divorce agreement. Waiting until after you have finalized a child custody agreement to research the tax impact will not be adviseable.

    State law on custody of the children fails to dictate who receives the tax deductions. If your child custody agreement is entirely silent on this issue, the parent with primary residential or sole custody can have all the tax benefits available throughout the children. That party is able to claim the children as deductions, and many others. This can be a significant issue. You will discover parents who simply assume that when they are paying lots of money each year in support, they will be able to go ahead and take children as deductions. Not. It is incredibly important considering that supporting your children payments will not be tax deductible into the payor and they are not taxable towards the recipient parent.

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    Thus, when negotiating your kid cusody agreement, you must address the issue of methods custody are going to be structured and who can obtain the tax benefits. This negotiation should be a part of a total financial scheme that encompasses a factor of issues, including separation, child support, property, alimony, and tax impact.

    The cabability to claim head of household rather than married filing separate or even filing single could be incredibly crucial to your overall tax scheme. You can claim head of household in case you have your young ones for longer than 50% of the time. Thus, a head of household tax filing should be part of the overall negiating outline in a divorce or separation situation. A youngster custody agreement which is silent with this dilemma is really not a highly negotiated or written agreement.

    Your youngster custody agreement can address this challenge in many ways. If your little one custody agreement provides for joint shared custody, it must state who may have the children for 50% of times. In case you have two children, you can divide that up in order that each parent has the potential of fiing for head of household. In the event you simply have joint custody and the other parent has residential custody, you are able to still offer a head of household deduction for the other parent by wording the agreement in ways that permits that filing.

    There are other tax benefits offered to parents that have to be looked at as when negotiating a son or daughter custody agreement. Many or most of those tax benefits are variable based upon your revenue level ad whether or not you could claim the child or children as deductions. Should you be really thinking via your custody agreement, you might negotiate many of these benefits. The goal should be to maximize all available benefits for both parties, thereby providing an overall highly advantageous tax impact for your personal custody agreement.