When it comes to determining child custody matters there is a lot on the line. Most parents are concerned with securing custody so they can be with their children as much as possible. This makes sense since many parents are interested in playing a meaningful role in the lives of their children. Parents focused on this may not be aware that the outcome of a custody proceeding will impact other things in their lives as well.
One of the things custody could have a bearing on is income tax filings. There are multiple tax matters that need to be considered.
For example, unmarried individuals who have custody of their children at least half of the year and earn at least 50 percent of the householdâs income will be able to file as head of household. Filing under this status is beneficial because it generally leads to higher deductions and a lower tax rate for filers.
Determining which parent will claim the children as dependents is important to determine as well. Though the IRS says that the parent with the majority of the custody time who financially supports the child is usually deemed to be the one who can claim a child as a dependent, this can be worked out between the parents. This too is important since single parents with an adjusted gross income below $75,001, with dependent children under the age of 17, can take a $1,000 credit per child. Similarly, dependent children are considered to be exemptions and in many situations several thousand dollars can be deducted per child.
Other tax matters concerning children include earned income tax credit, dependent care spending accounts and child care.
Since there is so much to consider related to child custody it is vital to work with a lawyer who has a handle on all those matters.
Source: Forbes, â8 Things Single Moms And Dads Need To Know About Taxes,â Emma Johnson, Jan. 26, 2015