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Kid Custody Agreement and Taxes

A youngster custody agreement can have severe implications on your tax filing and your taxes general. This problem should be addressed with your lawyer or with your accountant even though you are going through the method of negotiating or litigating child 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 youngster custody does not dictate who gets the tax deductions. If your kid custody agreement is entirely silent on this concern, the parent with primary residential or sole custody will have all of the tax positive aspects accessible by means of the kids. That party will be able to claim the kids as deductions, and so forth. This can be a substantial 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 youngsters as deductions. Not so. This is extremely crucial 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 child cusody agreement, you ought to address the concern of how custody will be structured and who will recieve the tax benefits. This negotiation need to be a component of an general economic scheme that encompasses a consideration of all issues, including youngster custody, kid assistance, property, alimony, and tax impact.

The potential to claim head of household instead of married filing separate or even filing single can be extremely 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 element of the general negiating outline in a divorce or separation scenario. A youngster custody agreement that is silent on this concern is genuinely not a well negotiated or written agreement.

Your youngster custody agreement can address this concern in a quantity of approaches. If your youngster custody agreement offers for joint shared custody, it ought to state who has the youngsters for 50% of the time. If you have two young children, you can divide that up so that every parent has the possibility of fiing for head of household. If you merely have joint custody and one particular parent has residential custody, you can still offer 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 accessible to parents that have to be regarded when negotiating a youngster custody agreement. Numerous or most of those tax benefits are variable depending upon your income level ad regardless of whether or not you can claim the youngster or kids as deductions. If you are really thinking through your kid custody agreement, you will negotiate all of these rewards. The objective ought to be to maximize all obtainable rewards for each parties, thereby supplying an overall very advantageous tax impact for your

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