Child Custody Agreements

By Staff Writer

Tax Aspects of Child Custody Agreements
Your child custody agreements will have serious tax implications, and you should think these through with your attorney or accountant as you go through the process of negotiating child custody. For example, if your children live with you more than half the year, you will qualify as head of household, and you can deduct them. But if you have joint custody with your spouse, and neither one of you lives with the kids more than 50% of the time, then neither one of you qualifies as head of household. This could have important ramifications for your taxes, and you should factor it in when calculating alimony or child support.

You can get around this if you have more than one child. Your spouse can claim head of household by being parent to one child more than 51% of the time, and you can claim head of household for the other child or children. This may seem like a lot of trouble to go to, but the tax savings will count significantly in your yearly financial profile.

Other Tax Credits Available
There is also a tax credit available for a parent who is employed, and who is the main custodial parent for a child under the age of 13. The higher your income is, the less your tax credit is. There are also deductions for medical expenses to think about. You and your spouse can each deduct your out-of-pocket medical expenses for your child, assuming that the total of the expenses is within a certain percentage of your adjusted gross income.

If you are coming up with figures on your child support calculator and alimony calculator, don't forget to consult your accountant about these additional tax breaks. Child Custody Agreements are more amicable if all the financial perks and burdens are thoroughly explored. Do your homework now, and avoid bitterness or recriminations later, when one spouse feels that they have gotten a raw deal. There are recommended websites available to give you a free child support calculator to help you with your projections.