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A youngster custody agreement can have significant implications on your tax filing and your taxes general. This issue really should be addressed with your lawyer or with your accountant although you are going via the procedure of negotiating or litigating youngster custody or a divorce agreement. Waiting till right after you have finalized a kid custody agreement to investigate the tax impact is not recommended. State law on youngster custody does not dictate who gets the tax deductions. If your child custody agreement is entirely silent on this issue, the parent with main residential or sole custody will have all of the tax advantages obtainable by means of the youngsters. That party will be capable to claim the young children as deductions, and so forth. This can be a substantial concern. There are parents who merely assume that if they are paying thousands of dollars per year in support, they will be able to take the youngsters as deductions. Not so. This is incredibly essential when you contemplate that all child support payments are not tax deductible to the payor and they are not taxable to the recipient parent. Therefore, when negotiating your child custody agreement, you must address the situation of how custody will be structured and who will receive the tax advantages. This negotiation really should be a element of an all round financial scheme that encompasses a consideration of all problems, including kid custody, kid support, home, alimony, and tax impact. legal separation in california The capacity to claim head of household as an alternative of married filing separate or even filing single can be extremely important to your general tax scheme. You can claim head of household if you have your youngsters for much more than 50% of the time. Thus, a head of household tax filing really should be a element of the overall negotiating outline in a divorce or separation situation. A youngster custody agreement that is silent on this situation is actually not a properly negotiated or written agreement. Your youngster custody agreement can address this concern in a number of methods. If your youngster custody agreement gives for joint shared custody, it must state who has the children for 50% of the time. If you have two children, you can divide that up so that each parent has the possibility of filing for head of household. If you basically have joint custody and one particular parent has residential custody, you can nevertheless give a head of household deduction to the other parent by wording the agreement in a way that allows for that filing. There are other tax positive aspects accessible to parents that have to be considered when negotiating a child custody agreement. Several or most of individuals tax rewards are variable based upon your earnings level ad whether or not you can claim the kid or children as deductions. If you are actually thinking by way of your youngster custody agreement, you will negotiate all of these positive aspects. The objective must be to maximize all available positive aspects for each parties, thereby supplying an all round extremely advantageous tax effect for your youngster custody agreement.