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Kid Custody Agreement and Taxes

A youngster custody agreement can have critical implications on your tax filing and your taxes general. This problem should be addressed with your attorney or with your accountant although you are going through the method of negotiating or litigating youngster custody or a divorce agreement. Waiting until right after you have finalized a kid 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 kid custody agreement is completely silent on this issue, the parent with major residential or sole custody will have all of the tax positive aspects readily available by means of the children. That party will be in a position to claim the children as deductions, and so forth. This can be a important concern. There are parents who simply assume that if they are paying thousands of dollars per year in assistance, they will be in a position to take the children as deductions. Not so. This is extremely essential when you take into account that all youngster support 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 should address the problem of how custody will be structured and who will recieve the tax benefits. This negotiation need to be a portion of an overall financial scheme that encompasses a consideration of all issues, such as kid custody, kid support, property, alimony, and tax impact.

The potential to claim head of household rather of married filing separate or even filing single can be incredibly important to your general tax scheme. You can claim head of household if you have your young children for much more than 50% of the time. Thus, a head of household tax filing need to be a element of the overall negiating outline in a divorce or separation scenario. A child custody agreement that is silent on this problem is actually not a nicely negotiated or written agreement.

Your kid custody agreement can address this concern in a number of methods. If your kid custody agreement gives for joint shared custody, it need to state who has the youngsters for 50% of the time. If you have two youngsters, you can divide that up so that every single parent has the possibility of fiing for head of household. If you merely have joint custody and one parent has residential custody, you can nonetheless give a head of household deduction to the other parent by wording the agreement in a way that makes it possible for for that filing.

There are other tax positive aspects accessible to parents that have to be regarded as when negotiating a youngster custody agreement. Numerous or most of those tax advantages are variable depending upon your income level ad regardless of whether or not you can claim the kid or young children as deductions. If you are truly thinking by way of your child custody agreement, you will negotiate all of these rewards. The objective need to be to maximize all available rewards for both parties, thereby providing an overall extremely advantageous tax impact for your

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