Money is a central aspect of many issues that arise during divorce. From things like alimony and spousal support to property division and more, people in Texas are understandably focused on making sure their post-divorce finances are in order. However, many people end up overlooking the future tax implications of the decisions they make during divorce. Even child custody can affect how taxes might look in the future.
Claiming a child on a tax return might not be quite as lucrative as it was before the Tax Cuts and Jobs Act of 2017 eliminated the dependency exemption, but it is still important to figure out which parent gets to claim a child. Tax credits for the child as well as earned income credit are still benefits for claiming a child. After divorce, only one parent can claim a particular child per year.
When one parent has primary custody, he or she is usually the one who gets to claim the child. Situations where parents share joint custody are less clear, especially since few people make a written agreement about who gets to claim their child as a dependent for tax purposes. Those who do have agreements can take a number of approaches, including alternating years for claiming their dependent. Parents with multiple children may choose to either alternate years or even split up the dependents they claim each year.
Parents can easily end up with tunnel vision during divorce proceedings. In the middle of determining child custody and support and securing a sense of financial stability for the future, forgetting about things like taxes can be surprisingly easy. However, working alongside an experienced Texas attorney can be helpful for parents who are worried about overlooking important things during divorce.