DEPENDENCY EXEMPTION

Divorcing parties need to be educated regarding the many different options they have as it pertains to tax filing during and subsequent to their divorce.  Parties that have attorneys representing them may not realize that their attorneys are actually precluded from giving them tax-related legal advice, and that they need to seek tax related advice from an accountant.  It is important that when you are divorcing that you have a good accountant to advise you as to the tax issues that can arise in divorce situations.

One of the items that parties find themselves arguing over is the dependency exemptions that they may be allotted for their minor children.  When the parties filed taxes together, they were able to both benefit from claiming the dependency exemptions for their children.  Upon divorce, when the parties no longer file taxes together, the parties need to determine who will receive the dependency exemptions for the minor children, and in which years.  Only one party can claim a specific dependency exemption in any given tax year.

We usually advise our clients to talk to their accountant about what the most cost effective way is to handle the division of dependency exemptions.  The answer is different for parties depending upon the circumstances of their divorce agreement.  There are a lot of factors to consider when making this decision, including, but not limited to: whether or not spousal support will be awarded, whether or not the spousal support will be taxed, how much will be paid in child support, how many children there are, who is paying support, who is receiving support, the tax filing status of the parties, the custody provisions, etc.  The issue of who should receive the dependency exemptions is not a simple question to answer.  Thus, it is best that if you are going through a divorce that you talk to your accountant about all possible support and tax scenarios so that you are educated as to how the dependency exemption can benefit you or your former spouse.

One Response to “DEPENDENCY EXEMPTION”

  1. http://www.youtube.com/

    Good work. Cheers for posting.

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