How a dependence tax deduction is determined

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Even when parents have shared custody, it rarely works out where the child spends an even 50 percent of his or her time with both parents. The IRS gives the parent who had custody of the child the most throughout the year a tax break. Even if your divorce decree states that you share equal custody, both parents cannot receive the tax break. Below are ways to determine which parent can claim a dependent on their taxes:

The parent who spent the most days throughout the year with the child can claim him or her as a dependent. If you had your child 55 percent of the time and your ex had your child 45 percent of the time, you may claim a dependent.

If your child in fact did spend exactly half the time with both parents, the parent with the highest adjusted gross income gets to claim your child as a dependent.

Waiving the dependent tax deduction

A divorced couple can agree to terms on their own to allow one or the other to claim their child. The one who qualifies to claim the dependent can waive the deduction. In order to do this both parents must still pay 50 percent of the child’s living expenses for the year and the equal custody agreement must be memorialized in a court ordered divorce decree. If you and your ex agree to these terms, the one waiving the dependent can sign IRS Form 8332, giving the other the ability to claim the child as a dependent.

Factors That Go Into a Child Custody Decision

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The following are the factors a judge considers when making a decision about child custody:

• your child’s age
• the mental and physical well-being (or lack of it) of each parent
• each parent’s care taking capacities and the home environment that each parent could provide to the child
• the role of each parent thus far in taking care of the child
• the child’s relationship to each parent
• the time available to each parent to be with the child, as the judge may wish to maximize the child’s time with a parent as opposed to a babysitter or daycare center
• the environment that the parent can create for the child
• the presence of siblings in the family and the siblings’ relationship to each parent and to each other
• prior bad acts of either parent (as, for instance, abuse and neglect)
• parental drug or alcohol problems
• religious factors
• the willingness of each parent to keep the other parent involved in the child’s life and to facilitate the other parent’s access to the child
• each parent’s adult relationships including non-marital sexual relations.

In the long run, the judge wants to do what’s best for the child. If time sharing and 50/50 custody is a possibility for the child, that will be the plan set in place.

How to Divide Your Assets in a Divorce

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Before a divorce can be granted, all of the couple’s assets must be divided in a way that is agreed upon by both parties. This can get really difficult when it comes to the couple’s home, vehicles, securities, valuable collectibles, retirement benefits, and household items. But if you can both agree, it will make the divorce process quicker and easier. The following may help you divide your assets amicably:

Make a list

Make a list of all of your assets with your spouse. You should include your home or any joint property (land, a vacation home, lake cabin, etc), all vehicles, bank accounts, securities (stocks, bonds, money market accounts, CD’s), valuable collectibles, household items including furniture and appliances, and retirement savings and plans.

Play Nice

If you and your spouse can make a list in an amicable way and agree to how you’re going to divide your possessions you can save a lot of time and money. When there are property disputes, a third party has to be brought in to help you come to an agreement. Ninety percent of divorces are settled without a trial. Seeing a divorce mediator or hiring a divorce attorney can help you handle your property division.

Dividing the House and Car

The home and cars are often the cause of dispute in a divorce. The home is usually given to the parent with primary custody of the children if there are any. The car is more complicated and isn’t necessarily given to the spouse who solely holds the title.  The car may become marital property and given to a spouse depending on how much it’s worth.

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Are You Entitled to Alimony?

Deciding if a spouse will be awarded alimony in a divorce is relatively simple. When one spouse makes significantly more money than the other, that spouse will probably be required to pay the other alimony. But, if both make around the same amount each year, neither is usually required to pay alimony.

How is Alimony Set by the Court?

Determining whether a spouse will receive alimony after a divorce is the easy part. Determining the amount to be paid isn’t as simple. The following factors are considered when determining the amount of alimony to be paid:

• how much money each person could reasonably earn every month
• what the reasonable expenses are going to be for each of them
• whether an alimony award from one to the other would make it possible for each to go forward with a lifestyle somewhat close to what the couple had before they split—known in divorce law as “the standard of living established during the marriage”

If there isn’t enough money for both parties to establish a standard of living close to their marital standard of living, judges may look for ways to make the divorcing party share in the financial pain equally.

How Long Do Alimony Payments Last?

The amount of time alimony is required to be paid varies from each couple. Payment are usually always paid each month and can last until:

• a date set by a judge several years in the future
• your former spouse remarries
• your children no longer need a full-time parent at home
• a judge determines that after a reasonable period of time, your spouse has not made a sufficient effort to become at least partially self-supporting
• some other significant event, such as retirement, occurs, convincing a judge to modify the amount paid
• one of you dies

Every case is different, and not every divorce is as easy as determining who makes more. Contact us to speak to a divorce lawyer and ensure you get what you deserve.