Issues relating to a divorce in Texas are many. These include how to split retirement accounts, whether or not to keep or sell a house and whether or not the parents will share joint custody of children or one parent will have sole custody with the other receiving stated parenting time and visitation rights only. Couples must navigate these and other decisions not just during a divorce but often after the divorce is over as well.
A good example of this is tax time. As you prepare to file your prior year’s tax returns this spring, you may have a child or children to claim as tax dependents. In the past, divorced parents typically assumed that the parent who was given legal custody is the one who can claim the children as dependents. This is true in many situations but not in all. A news article recently discussed some circumstances under which a non-custodial parent may be able to claim his or her children as tax dependents.
Such decisions can be made during an initial divorce settlement. How often a particular parent has the children can affect this choice. For example, it is more common today that children split time equally with parents versus living primarily with one and visiting the other only on odd weekends. In these situations, spouses can agree to take turns claiming children as dependents. Additionally, if there are multiple children, the mother can claim one or more and the father can claim others, giving both parents the ability to claim such deductions.
When identifying your child custody agreement, this is just one more topic that you may wish to discuss with your attorney. Getting a good view of all financial matters down the road can help make the entire process easier.
Source: Huffington Post, “Children of Divorce: Who Gets the Tax Exemption?,” March 13, 2014