Health & Fitness
It's Tax Time, Some Things to Consider in Family Law Cases
What you should consider during tax time if you are divorcing or have custody and support orders.
April 15 is tax time and it's just around the corner. For some of you this blog may be coming too late, but it can prepare you for next year's tax season especially if you are considering divorcing or you are going through a divorce or there are existing child custody and support orders already in place.
First my disclaimer: I do not claim to be an accountant or a tax expert. These are only some guidelines that you should consider when you meet an accountant for information or advice.1) For those who are in the process of going through a divorce or have just recently finalized their divorce it is always best to consult with your accountant to determine what are the best options available to you which can result in tax savings. This doesn't mean that you have to consult with an accountant every year or that you have to hire someone to prepare your taxes. The goal of this is for you to get a better understanding of your current situation and to find better options to minimize your tax consequences.
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3) In regards to child support it is neither considered income and it is not deductible.
4) If you owe child support, please remember that your tax returns can be intercepted by collections in order to pay the support that you owe to the other parent. Remember both parents are as financially responsible for their children.5) In general, the primary custodial parent, meaning the parent who has the children living with them more than 50% of the time is allowed to claim them as dependents and get a tax exemption. However, it is possible for the noncustodial parent to claim the children if the custodial parent signs the release of the exemption using IRS form 8332. Typically the primary custodial parent is allowed to file as head of household and only one parent can do this at a time. By allowing the noncustodial parent to claim the exemption it may result in more income, meaning more child support.
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7) You may not know it, but it is possible to deduct the fees for professional help you have obtain in getting tax advice in relation to your divorce. Fees from an attorney, financial planner or accountant can be deductible. It is always a good idea to keep an itemization of your costs for these types of services.
8) Even though you have began your divorce, if the court has not yet issued a divorce decree you are still legally considered married and you may want to consider filing a joint tax return. You know it offers great tax saving than filing single. However you cannot force the other spouse to file this way if they do not want to.9) Please be aware that not all attorneys are tax savvy and most will refer you to speak with an accountant to determine what are your best options. The advice you get should be tailored to your own particular and specific needs.