Claiming tax breaks for divorced parents

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

Examining the divorce asset distribution rules in Pennsylvania

Pennsylvania couples who are thinking about divorce may be interested in how asset division works in the state. Understanding these principles can help a spouse to prepare for the end of a marriage, in order to protect their rights to property during the process.

In Pennsylvania, property is generally divided into marital and separate property categories. In general, separate property is any property obtained before the marriage or after the separation, any gifts or inheritance given to only one spouse and any personal injury damages awarded to a spouse separately. Everything else is considered marital property. In some cases, however, separate property can be considered marital property, depending on how it is used during the marriage. When the separate property is commingled with the rest of the marital assets, it may be considered marital property. If the separate property is used to purchase jointly-owned assets, like a home, this may also make it marital property.

Marital property is subject to equitable distribution during a divorce. This doesn’t necessarily mean that there will be an equal division of the marital assets, but simply that they will be divided in a way that a court sees as fair to the parties. A court will look at various financial and other factors in making this determination.

Rather than leaving this property division decision up to a judge, couples may be able to negotiate their own divorce settlement agreement that would cover this issue. If many of the divorce legal issues are not contentious, a couple may be able to save time and money by using mediation or collaborative divorce to govern their separation. An attorney with experience in family law may be able to assist a client in going through the process.

Source: Forbes, “Divorcing Women: Here’s How to Protect Your Inheritances And Gifts“, Jeff Landers, August 19, 2014

Source: Forbes, “Divorcing Women: Here’s How to Protect Your Inheritances And Gifts“, Jeff Landers, August 19, 2014

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