Parents who are divorcing may not realize that there are some federal income tax credit and exemptions available for single parents that they may be able to take advantage of. These tax breaks may be able to ease some of the financial burden that parents sometimes shoulder following the end of their marriage.
Parents may claim children as dependents, but it is not possible to split the deduction. If there is more than one child, parents sometimes agree that each will claim one or more of the children. Parents may be eligible for deductions and tax credits for each dependent child.
The head of household filing status is allowed for single parents who make at least 50 percent of the household income and have children living with them for at least 50 percent of the year. This may put the parent in a lower tax bracket than if single filing status is used. Some deductions for qualifying child care expenses may be available as well as a dependent care spending account, which allows a parent to deposit money up to a certain sum tax-free. This type of account is established through a parent’s employer or business.
Some divorce legal issues can often be difficult to resolve, as parents face child custody, visitation, support issues and asset division determinations. It is best when divorcing parents strive for solutions that are in their children’s best interests, although there may be disagreement about what those should be. A family law attorney can assist a client in the negotiation of these matters. Even if an agreement can be reached, however, it will ultimately be subject to the court’s approval, making the advice of legal counsel advisable.
Source: Forbes Magazine, “8 Things Single Moms And Dads Need To Know About Taxes”, Emma Johnson, Jan. 26, 2015