Children, Divorce and Taxes (Part 1)

It's that time of year! Taxes. Now parents start thinking about filing their taxes and confusion instantly hits. At the office, we start getting a lot of calls regarding divorce inflicted tax changes and who can claim the children on his/her taxes.

We have answers!

For all of your questions, we created a three part series regarding common questions about children, divorce and taxes. This post addresses questions about how to decide who can claim the children in the absence of a court order.

• Who is a qualifying individual for the dependent exemption?

In the case of a child, a person under the age of 19 or under 24 if a student as of the close of the tax year, for whom the parent has provided over half of the child’s support.

• Do the parents need to prove that they have provided more than 50 percent of the child’s support during the year?

No, generally parents don’t have to prove they have provided the support. But this is a requirement if a person other than the parent is seeking to claim the child tax exemption.

• Are there special rules for divorced parents?

Yes, the IRS sets out special rules for which parent can claim the child. This is generally the custodial parent: the parent with whom the child has spent more than 50 percent of the year.

• Who gets to claim the child tax exemption if there is no court order?

You will have to use the IRS’s rules for determining who can claim the child.

• How does the IRS determine who can claim the child?

The IRS looks at who is the custodial parent, who is the parent the child lives with for the greater part of the year, and generally allows that parent to claim the child.

• Who can claim the child if both parents had the child an equal amount of time?

In this case, the parent with the higher adjusted gross income may claim the child tax exemption.

For the extended article, check out our January newsletter. If you have more concerns regarding children, divorce and taxes, feel free to email me at contact@evantaylorlawoffice.com and we will provide answers to your questions!

Income Calculation Word Problems - Child Support

Hey, I wasn't very excited about math when I was in school. What a loss, because there is so much that math can describe. Of course, in my business the math I use is mostly arithmetic - when I am calculating income for child support. 

Here are two word problems.

Johnny's Problem

Johnny works at the race track as a cashier. He makes $ 14 per hour, and has worked 72, 80, and 74 hours during the last three pay periods. He is paid biweekly and doesn't have any benefits. He also served in the military, and has a military disability rating, so he receives $ 340.00 per month in Veterans Administration Benefits. What is his average gross monthly income?

Katie's Problem

Katie is a stay-at-home mom but she has a business on the side. She makes bows for cheerleaders and does some tailoring for clients across the Oklahoma City Metro with the assistance of two part-time employees.  She had been doing this for two and half years, and for the past year she grossed $ 45,800 and the year before $ 38,700. Her expenses have been the same for each year, at $ 12,000 in wages and employee related expenses, and $ 2,500 in materials, telephone and home office supplies. She also wrote off $ 600.00 in depreciation for each year on her taxes. She is married, and her husband, a police officer, makes $ 36,000 a year.  What is her average gross monthly income?

The Flow of Child Support : The Back End

What does a child support computation look like from the back end? A lot like the array of sticky notes on the table in the picture to the right.

In Oklahoma, we have child support guidelines that tell us how to do the math to figure child support. These guidelines are just legal rules on what numbers we put in and how we put them together to figure child support.

For a taste of the guidelines you can review Section 118, 118a-i, and 119. Of course, the guidelines are just rules for what math to use, what really matters is the numbers that we put into them. These input numbers are what we lawyers spend most of the time fighting about.

We will be looking in later posts about how to calculate income and expenses related to child support, but I thought we could start with the computation itself.  You can see the mechanics more clearly in the flow chart below, just click on it to enlarge.

Child Support:

A Flow Chart