Tax Issues Relating To Children During A Divorce
When you are in the process of getting a divorce and there are children involved, there are several main issues that must be ironed out before the divorce is through. By discussing and agreeing on these issues before the divorce, the decisions you and your spouse have reached will be included in the divorce decree, which means that both of you must follow these rules. Here are three important ones that relate to the children.
Who Will Claim Them As Dependents?
When the time comes for tax preparation, you will need to know who gets to claim the kids as dependents. Couples can work this out in any way they wish, but it might benefit you to fight for this right during the negotiations.
If you have the right to claim the kids as dependents, it will lower your tax liability. This means that you will pay lower taxes, and you might be more apt to receive a refund instead of owing taxes.
Who Gets The Childcare Cost Write-Offs?
Generally, the spouse that actually pays the childcare costs will be the one that gets to write them off on taxes. You can, however, work out arrangements during the negotiations that relate to who will pay these costs. Even if the children are primarily going to be with you, you might be able to get your spouse to agree to pay some or all of the costs relating to childcare.
If this happens, you may want to give him or her the right to write off these expenses for tax purposes, or you can ask for the right to do this.
Who Claims Private Education Tax Credit?
Some states, such as Indiana, have a tax credit you can apply if you have a child enrolled in a private school or home school. If your kids are in either one of these, one of you will get to claim a deduction for this, but you will need to decide who gets this. In Indiana, this tax credit is worth $1,000, and having the ability to claim this could help reduce your tax liability.
Couples have the freedom to work out these details in any way they wish, but you may want to seek advice from a divorce lawyer like Kalamarides & Lambert to find out what would be best for you. Your lawyer can help you fight for the best settlement, and this includes having rights to these tax benefits.