In addition to the various other issues, the parties need
to agree regarding tax exemptions, deductions on taxes during the year
of the divorce, and taxes in relation to certain transfer payments including
spousal maintenance. Only one of the parties may claim a minor child
as an exemption during any given year. Therefore the parties need to
decide which party has the exemption or whether the exemptions will
be alternated in some fashion. In order to claim head of household the
minor child must spend at least half of their time with that individual
parent.
Child support payments are not deducted by the person
who makes the payments and are not reported as income by the one who
receives the payments. Spousal maintenance or alimony on the other hand
is deductible on the tax returns of the person who pays the maintenance
and is included in income by the person who receives the income. Therefore,
in determining how much spousal maintenance and child support should
be ordered, the parties should consider the various tax ramifications
so that they can try to reach an arrangement that is suitable for tax
purposes as well as other concerns.
If the parties are still married by the end of the calendar
year (the divorce was not completed) they can still claim a joint tax
return. In those situations there must be an agreement as to how the
tax payments and/or refund will be handled. In addition, if the parties
choose to file married filing separately, they must reach an agreement
as to which deductions each parent will take.
