How does child custody arrangement affect tax exemptions?
Family law issues such as divorce are complicated. In Orange County, California, people who have been through a divorce understand that the outcome of the legal process will have a huge impact on those who are involved, including when it comes to taxes.
Divorce is not all about the custody of the children and the property and assets involved. Divorcing spouses should also consider the tax implications of being single with dependents. For a parent who will become the custodial parent of the children, that person may be able to get an exemption when filing a federal income tax return. On the other hand, noncustodial parents will not be able to get the exemption.
For parents who have joint custody of the children, there are simpler ways to get an exemption. Those parents can create an agreement that states that for a certain period of time, the minor child lives with one parent and the other children live with the other parent. In that case, both parents can get a tax exemption.
Tax exemptions depend on the child custody arrangement. Parents need to understand that they do not have to seek the sole custody of the child for the sake of tax exemption. If both parents want to reduce their taxes, there are other ways that can help them achieve those goals.
When discussing child custody and related family law issues, it is important for parents to focus on the best interests of the children in order for them to reach an agreement that will help them to be effective co-parents for the benefit of the children.
Source: The Huffington Post, “Children of divorce: who gets the tax exemption?,” Stann Givens, Mar. 13, 2014