Today TaxMama is watching a discussion in the TaxQuips Forum. It’s about what happens after a divorce and the family is fighting over who gets to claim the child as a dependent.
Inevitably, there is a battle over the very valuable head of household filing (HOH) status and the various credits generated by claiming dependents. To avoid this battle, here are some rules to divorce by:
1) The divorce agreement should spell out specifically, what ‘family’ support means.
a. How much of that is for child support (not income to recipient; not deductible to payer)?
b. How much is for spousal support (income to recipient; deductible to payer)?
2) Spell out who gets to claim the child each year until the child is 18, or 24 (if going to college).
a. Either lay out a schedule, by year, or spell out the specific instances under which each parent will make claim.
b. Better yet, fill out a Form 8332 for each year until the child or children reach adulthood. This form will override any other arbitrary decisions.
c. When there is more than one child, share. If each parent gets to claim at least one child, you both have HOH filing status, and you both get your share of the various credits.
3) Make sure your attorney is prepared get Form 8332 signed during the proceedings and to address these issues clearly during the negotiations and in the paperwork – or look for another attorney. Trust me. When it comes to children, if your attorney doesn’t have the guts to define this issue, you will be dealing with relationship extortion for years, until your children come of age.
Of course, yours could be the rare relationship that is totally civilized, where both parents are considerate and willing to plan things out sensibly each year. I have seen several successful post-marriage relationships, true. But, let’s face it, if you could get along that well, would you be getting divorced?
And remember, you can find answers to all kinds of questions about divorce and children and other tax issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]