My ex and I are divorced, but have a child together. Can I claim the dependency exemption for my child on my taxes?
Rules regarding who can claim a child on his/her taxes can be found in IRS Publication 596. In general, you can only qualify to claim a child for a tax credit or dependency exemption if the child has lived with you for over half of the year. For those parents that aren’t sure exactly how to file their taxes now that they’re divorced, it might be worthwhile contacting H&R Block for tax support. They can provide useful advice about claiming children on tax reports to make sure the report is done on time. Raise even has some promo codes for H&R Block on their website (go now). Hopefully, that will help.
Child care is difficult when parents are divorced, especially when it comes to tax. Sometimes in crafting child support orders, family law professionals and courts deliberately plan to give the noncustodial parent the dependency exemption and child tax credit. This is especially true if the support recipient has lower income and is in a lower tax bracket and the supporting parent is in a higher tax bracket. The party in the higher tax bracket may be able to make better use of the exemption and credit. Sometimes allowing that person to claim a child will enable us to order a higher amount of support because there is more disposable income available to pay support. It’s a win-win for everyone.
The IRS allows the noncustodial parent to claim a child if each of the following requirements are met:
“1. The parents:
a. Are divorced or legally separated under a decree of divorce or separate
maintenance,
b. Are separated under a written separation agreement, or
c. Lived apart at all times during the last 6 months of 2012, whether or not they are
or were married.
2. The child received over half of his or her support for the year from the parents.
3. The child is in the custody of one or both parents for more than half of 2012.
4. Either of the following statements is true.
a. The custodial parent signs Form 8332 or a substantially similar statement that he
or she will not claim the child as a dependent for the year, and the noncustodial
parent attaches the form or statement to his or her return. If the divorce decree or
separation agreement went into effect after 1984 and before 2009, the
noncustodial parent may be able to attach certain pages from the decree or
agreement instead of Form 8332.
b. A pre-1985 decree of divorce or separate maintenance or written separation
agreement that applies to 2012 provides that the noncustodial parent can claim
the child as a dependent, and the noncustodial parent provides at least $600 for
support of the child during 2012.”
IRS Publication 596 (2012) [http://www.irs.gov/pub/irs-pdf/p596.pdf].
Remember, without a signed Form 8332 or equivalent, the noncustodial parent may not claim the child.
This article is intended for informational purposes only and should not be construed as legal or tax advice. Remember, because every case is different, nothing replaces personalized advice from a professional. For further discussion of divorce and custody related tax issues, call attorney Shawn Weber at 858-410-0144 for a free telephone conference or go to his website at n4d.8c6.myftpupload.com/.
Can I deduct my divorce or family law legal fees on my taxes?
Generally, divorce fees are not deductible.
The general rule is that divorce is a personal expense and is not deductible as a business expense. United States v. Gilmore (Gilmore I) (1963) 372 U.S. 39. So the short and easy answer is, “No.”
However, don’t despair. There are still some ways you can get a break from some of those fees.
Here are some exceptions to the general rule:
Fees to obtain alimony or taxable pension distribution.
If you are a spousal support or alimony recipient, you can deduct those fees relating to obtaining taxable spousal support or a taxable pensions distribution. (See I.R.C. 212(1); Treas Reg. 1.262-1(b)(7); Wild v. Commr. (1964) 42 T.C. 706. So, those fees that you spend with your attorney to get spousal support from your ex can usually be deducted. Don’t forget, the fees for getting your share of a pension distribution may also be deductible.
Tax planning or advice.
The costs of tax planning or advice are deductible. I.R.C. 212(3). We family lawyers tend to shy away from giving anyone tax advice because we are, for the most part, not tax attorneys or CPAs. There are plenty of sites such as can be found at https://www.taxrise.com/free-tax-consultation/ that offer you a free tax consultation if needed. However, there can be certain occasions as you are planning your divorce or legal separation that your attorney is able to give you some tax advice. (For example, tax advice about dependency exemptions, deductibility of spousal support payments, post-divorce real estate transfers, etc.) When that happens, the associated fees can be deductible.
Capitalize.
Even if the fees for your divorce lawyer aren’t deductible, expenses can often be capitalized. Serianni v. Commissioner (11 Cir 1985) 765 F.2d 1051, 1985 CFLR 2892. Talk to your CPA about how this can be done.
Below the line.
Now these aren’t the greatest of deductions because they are below the line. But every little bit helps… right?
Talk to your lawyer early!
If you are interested in deducting some of your legal fees on your taxes, it is important that you have a conversation with your family law attorney early so that (s)he knows to keep track of your fees and what portions may be deductible. Typically, your attorney can give you a letter at the end of the year indicating what portion of your fees was, for example, associated with the collection of alimony. Usually, this so-called “allocation letter” sent by the attorney to the client will suffice as sufficient proof of the deduction to satisfy the IRS. Goldaper v. Commissioner (1977) T.C. Memo. 1977-343, 36 T.C.M. 1381, 1979 AFLTR 1110. However, if your attorney doesn’t know that you will want to claim this deduction, you will put him in the difficult and awkward position of trying to recreate his records. It’s better that he knows from the outset so that (s)he can keep better track.
As with every tax question, it’s a really good idea to talk it over with your CPA. The rules can be complex and there are limitations. However, with a little diligence, you may save some money at tax time.