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Your child custody arrangement may impact your tax returns

On Behalf of | Dec 14, 2017 | blog

Divorce is never easy, even in the best of circumstances when spouses agree to keep things amicable and work toward a fair resolution like responsible adults. Spouses with children and complicated assets often find it surprisingly complicated to reach far agreements in the divorce, even when they both truly wish to do so.

If you and yours spouse face a complicated divorce involving child custody, you must use every tool you have available to ensure that your child does not suffer unnecessarily, as well protect your own rights and priorities.

Professional legal guidance helps you examine each aspect of your divorce so you understand how to create the best life for the child you love. An experienced attorney also helps you prepare for the realities of raising a child with your spouse after the divorce finalizes.

How might child custody arrangements affect my taxes?

Claiming your child as a dependent on your tax returns offers you numerous valuable benefits. Unfortunately, if you claim your child as a dependent on your tax returns, your child’s other parent may not, and vice versa.

While the tax benefits you access when claiming a dependent child are substantial, they may only apply to one divorced or unmarried parent in a given year. Many parents resolve this issue by agreeing to trade off years claiming their children until they reach legal adulthood. If such a simple solution works in your circumstances, be sure to put it in writing and keep a copy.

It is also important to note that one parent may not claim some tax benefits for one dependent child while the other parent claims different benefits in the same year for the same child. Each tax year allows one parent to claim one child’s associated benefits.

Is your custody arrangement fair?

If you are the primary custodian of your child, then you may generally claim the tax benefits. However, many parents share relatively equal responsibilities in parenting, and may wish to share benefits from year to year. Before you finalize your parenting and custody agreements, be sure to address these tax issues to ensure that you understand your future tax obligations and privileges.

Professional legal counsel can help you determine what is fair in these circumstances and help you build strategies to protect the child you love and achieve your divorce goals, ushering you through this difficult time and into a new season of life.