50-50 Child Custody and Taxes
Divorce and changes in child custody could have many implications on your taxes at the end of the year. This becomes even further complicated when you and your ex-spouse evenly share custody of children. Costs for raising that child may then be split and deductions may need to be altered. An experienced custody attorney could help explain how 50-50 child custody and taxes affect each other.
As with nearly every tax issue, it is advisable to consult or retain a certified public accountant (CPA) to ensure that tax documents are filed correctly and to maximize any potential deductions. Parents often alternate who claims the children as dependents on the tax forms each year in an attempt to make the tax benefits somewhat even. However, this largely depends on your custody sharing situation and any child support arrangements.
What is 50-50 Child Custody?
50-50 child custody arrangements are when each parent has physical custody of their child exactly half of the time. Generally, one parent is considered the primary custodial parent, especially when they retain the marital home, and they may take the brunt of parenting responsibilities. Parents may also split up and delineate the various rights and responsibilities of raising the children.
One parent may take sole responsibility for extracurricular activities or education. This is usually the parent who retains control of the primary residence where the children generally live. These parents have the rights to decide certain aspects of their child’s life, but these arrangements generally require the consent of both parents for any major decisions. 50-50 shared custody can be very beneficial in that it offers children maximum and equitable exposure to both parents and their methods of child-rearing.
Filing for Taxes With Split Custody
In the case of 50-50 shared custody, both parents are not able to file the child as a dependent for taxes in New Jersey. Claiming a dependent may come with significant savings on taxes, so many parents find it advantageous to claim the child. It is always wise to speak to an accountant to see what benefit that deduction brings in light of the new tax law because sometimes one may not want to press further to claim the child if it will not make a significant financial impact.
Parents are unable to share tax exemptions 50-50 like they share their parenting rights and duties. 50-50 child custody and taxes differ greatly as taxes are governed by federal policy. If there is more than one child in the marriage, an accountant may advise the parents to each claim a child or otherwise distribute who gets to claim which children on their tax forms. These tax regulations do not vary at all if the parents were never married.
An Attorney Could Help Explain the Effects of 50-50 Custody
A New Jersey family attorney could help a parent with a 50-50 shared child custody arrangement. These types of parenting arrangements often are in the best interest of the child, allowing frequent and continuing contact with both parents and their respective families. However, these arrangements could be difficult with regard to filing taxes. Both parents may be used to the advantages of filing jointly and with one or more dependents, but after a divorce, it is necessary to make adjustments.
An accountant and attorney could together help parents understand the effects of 50-50 child custody and taxes. As with most custody issues, there may be advantages to negotiating a compromise between you and your ex-spouse. Call a New Jersey divorce lawyer today for a consultation on your case.