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The impact of child custody on a parent’s taxes

On Behalf of | Dec 3, 2018 | Divorce

Divorcing parents in Arizona need to decide how they will divide their assets, determine who will get any real property and have discussions on parental guardianship. Since these are all important topics, it’s easy for ex-spouses to neglect seemingly smaller issues, such as tax ramifications. However, proper tax planning can lead to substantial savings.

For example, there are a number of benefits to filing as head of household. However, doing so requires meeting stringent restrictions that will be placed both on the taxpayer and their dependents. The filing status is only eligible to parents who have physical custody of a child more than 50 percent of the year. The factors that determine head of household status can be even more complicated when there are multiple children and as well as child support payments involved. For this reason, it is recommended that both parents discuss their current and future tax statuses with a CPA and attorney.

If a parent does get the head of household designation, they will qualify for a larger standard deduction as well as a child tax credit. The deduction is $18,000 while the tax credit is $2,000 per kid.

In issues pertaining to child custody, a family law attorney will represent their client in the divorce proceedings. They can help their client draw up documents such as visitation schedules and parenting agreements. When there is a custody hearing, a family law attorney could represent their client, arguing that they are fit to serve as a parent or that allowing them custody is in the children’s best interests.