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Kid Custody Agreement and Taxes

A child custody agreement can have significant implications on your tax filing and your taxes overall. This concern must be addressed with your lawyer or with your accountant although you are going by means of the process of negotiating or litigating child custody or a divorce agreement. Waiting until following you have finalized a kid 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 youngster custody agreement is completely silent on this problem, the parent with main residential or sole custody will have all of the tax benefits readily available through the kids. That party will be able to claim the young children as deductions, and so forth. This can be a considerable concern. There are parents who just assume that if they are paying thousands of dollars per year in support, they will be able to take the young children as deductions. Not so. This is extremely crucial when you take into account that all child support payments are not tax deductible to the payor and they are not taxable to the recipient parent.

Therefore, when negotiating your kid cusody agreement, you must address the issue of how custody will be structured and who will recieve the tax advantages. This negotiation must be a part of an overall financial scheme that encompasses a consideration of all issues, including youngster custody, youngster support, property, alimony, and tax impact.

The capability to claim head of household rather 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 young children for a lot more than 50% of the time. Thus, a head of household tax filing ought to be a part of the general negiating outline in a divorce or separation situation. A youngster custody agreement that is silent on this problem is truly not a well negotiated or written agreement.

Your kid custody agreement can address this problem in a quantity of ways. If your youngster custody agreement gives for joint shared custody, it should state who has the kids for 50% of the time. If you have two young 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 a single parent has residential custody, you can still supply a head of household deduction to the other parent by wording the agreement in a way that permits for that filing.

There are other tax advantages readily available to parents that have to be regarded when negotiating a kid custody agreement. Numerous or most of those tax rewards are variable depending upon your earnings level ad whether or not you can claim the youngster or youngsters as deductions. If you are truly thinking by means of your child custody agreement, you will negotiate all of these benefits. The objective should be to maximize all accessible benefits for each parties, thereby supplying an general extremely advantageous tax impact for your

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