Divorce With Children: Tax Issues to Consider

Tax season is upon us again!  One of the items to consider when looking at child custody/primary residence issues is that of future taxes.

When a husband and wife with children file taxes they both benefit from the available tax deductions and exemptions for their children.  When couples divorce, only one parent can claim a child-specific tax exemption in any given year.  Also child related deductions might be impacted.  And don't forget about the adult children who still qualify as a tax exemption if they are in college.

Generally the child exemption goes to the primary residential parent.  However, in mediation a divorcing couple can make other determinations through a mediation agreement.  As long as both parties are in agreement and each deduction is only taken once, the parties can often make there own determination: a decision that works best for them and their children as well as for their individual tax bracket. 

Be sure to familiarize yourself with the tax information available, as well as seeking the advice of your tax professional and lawyer.