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Dallas Divorce Attorneys, Mark Nacol and Julian Nacol
Based in Dallas, Texas, the Nacol Law Firm PC, traces its roots to the firm of Mark A. Nacol and Associates PC, established in 1979. The Nacol Law Firm team shares its experience on a variety of legal topics here. See our recent posts below.
Finally Divorced: Now What Are My Tax Deductions Concerning The Kids?
“Mommy and Daddy can’t get along anymore, so we’re going to get a divorce, but we still love you.” Anonymous
Famous last words! Now the Divorce is over and the divorced parents have to deal with each other on working out who may use the tax deductions on the child’s expenses. This is a very serious tax matter for both parents since if done incorrectly; both parties could be audited, with fines, penalties and much ill feeling. Working together on applying for deductions correctly is a good start on joint parenting of your child. You may have both made the decision not to be together, but you should continue after a divorce to make decisions on your child and his/her well-being.
Dependent Exception for Children
A qualifying child for purposes of the child tax credit:
1. Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them
2. Under age of 17 at the end of 2011,
3. Did you provide over half of his or her own support for 2011,
4. Did they live with you for more than half of 2011 and are you “the custodial parent”.
5. Did you claim them as dependent on your return?
6. Did you not file a joint return for the year and
7. Are you a U.S. citizen, a U.S. national, or a U.S. resident alien?
The custodial parent is entitled to take this exemption for their child since the child has lived over 50% of the time with this parent and also provides over 50% of the child’s support.
Then noncustodial parent may be able to take the deduction in specific cases (Non-Custodial Parent Rule):
1. A Custodial parent signs a written IRS declaration giving the noncustodial parent the right to claim the designated child as a dependent for the year.
2. If combined, both parents provide more than half of the child’s support
3. The parents are divorced or separated under a written agreement at the end of the year or have lived apart during the last six months of the year.
4. The child lives with the noncustodial parent more than half the year.
When a parent has equal joint physical custody of the child, it is problematic as to which parent is entitled to the exemption. To avoid the unnecessary expense of confronting this issue both parents should try to come to an agreement as to who will use the child exemption for the year and have the other parent sign an IRS declaration as to the exemption. Always keep a date and time log of when the child is in residence with you during the year and the expenses incurred on their behalf. This log may be very important in resolving many problems by establishing possession times of your child and can be strong evidence in a court of law.
When these requirements are met, the noncustodial parent is eligible for tax breaks with the designated child.
Dependency Exemption Deduction: $3,700 for 2011 and $3,800 for 2012.
Child Tax Credit: This credit is worth up to $1,000 for each eligible child.
Higher Education Tax Credits: American Opportunity can be worth up to $2,5000 during first four years of child’s college education. The Lifetime Learning credit can be worth up to $2,000 and covers usually any higher education tuition costs.
Student Loan Interest Deduction: A deduction up to $2,500 on qualified student loan interest paid by the parent.
Tuition Deduction: The deduction is up to $4,000 for higher education tuition and mandatory enrollment fees.
The noncustodial parent can usually claim the tax breaks below as long as the support and the custody requirements of the noncustodial parent rule are met. The custodial parent can also usually claim these breaks.
1. Itemized deductions for the child’s medical expenses paid by parent.
2. Tax free employer provided healthcare benefits for the child
3. Tax free heath savings account (HAS) distributions to cover the child’s medical expenses
Only A Custodial Parent Is Allowed Tax Breaks:
Head of Household (HOH) Filing: This filing is better than filing as a single taxpayer since the standard deduction is larger and tax brackets are looser.
Tax Free Childcare Assistance: Under an employer plan up to $5,000 in federal income tax free reimbursement for child care expenses.
Earned Income Tax Credit: In 2012, this credit is worth up to $3,169 for one child and up to $5,891 FOR THREE OR MORE CHILDREN. As a parent’s income goes up, the credit is phased out.
Child Care Tax Credit: This credit of between $600 to $1500 for one child, and $1,200 to $2,100 for two or more children, based on a parent’s income.
For more information see IRS- Child Tax Credit for 2011 filings: http://www.irs.gov/pub/irs-pdf/p972.pdf Also, IRS Publication504 (Divorced & Separated Individuals) http://www.irs.gov.
Women at Risk: The Hazards of a Bad Relationship
Abusive men, and women (physical or mental), are all about control and frequently evolve from abusive homes themselves. Police desire to help abused women, but often even after a complaint has been filed, women will not pursue the charges out of fear. Feeling helpless, they are often terrified, brain-washed and really believe that they have nowhere to go. It is not uncommon for an abuser to be very charismatic and after beating his victim return home the following day with flowers showing great affection to his victim. Unfortunately, the victim tends to believe the transparent words “I’ll never do it again!”
One of the most frustrating things for family and friends outside a battering relationship is trying to understand why the abused person doesn’t just leave. It is important to remember that extreme emotional abuse is always present in domestic violence situations. Violence takes place in many forms, is unpredictable and can happen all of the time or just once in a while. Violence is criminal including physical and sexual assault. It is paramount to remember that physical violence, even among family members, is wrong and against the law.
Some of the reasons partners stay in domestic violence situations are:
1. Economic dependence.
2. Fear of greater physical danger or danger for children.
3. Fear of being hunted down and suffering worse beatings.
4. Survival. Fear that the abuser will kill.
5. Fear of emotional damage to children.
6. Fear of losing custody of children.
7. Lack of alternative housing.
8. Lack of job skills.
9. Social isolation resulting in lack of support from family and friends.
10. Social isolation resulting in lack of information about her alternatives and support systems.
11. Lack of understanding from family and friends, police, ministers.
12. Negative response from community, police, courts, social workers.
13. Fear of involvement in the court process.
14. Fear of the unknown, chronic anxiety, and/or depression.
15. Acceptable violence. Living with constant abuse numbs the victim so that they are unable to recognize that they are involved in a set pattern.
16. Ties to the community. The children would have to leave their school, and family would have to leave friends and neighbors.
17. Ties to home and belongings.
18. Family pressure.
19. Denial.
20. Loyalty.
21. Love. Often an abuser is quite loveable and loyal when he is not being abusive.
22. Shame and humiliation. “I don’t want anyone else to know.”
23. Guilt. They believe the abuse is caused by some inadequacy of their own.
24. Demolished self-esteem.
25. Lack of emotional support.
The following is a bill of rights for women in abusive relationships:
1. I have the right to ask for what I want.
2. I have the right to say no to requests or demands I can’t meet.
3. I have the right to express all of my feelings, positive or negative.
4. I have the right to change my mind.
5. I have the right to make mistakes and not have to be perfect.
6. I have the right to follow my own values and standards.
7. I have the right to say no to anything when I feel I am not ready, it is unsafe or it violates my values.
8. I have the right to determine my own priorities.
9. I have the right not to be responsible for others’ behavior, actions, feelings or problems.
10. I have the right to expect honesty from others.
11. I have the right to be angry at someone I love.
12. I have the right to be uniquely myself.
13. I have the right to feel scared and say “I’m afraid.”
14. I have the right to say “I don’t know.”
15. I have the right not to give excuses or reasons for my behavior.
16. I have the right to make decisions based on my feelings.
17. I have the right to my own needs for personal space and time.
18. I have the right to be playful and frivolous.
19. I have the right to be healthier than those around me.
20. I have the right to make friends.
21. I have the right to change and grow.
22. I have the right to be treated with dignity and respect.
23. I have the right to be happy.
Anyone can be a victim of domestic violence. Although both men and women can be abused, most victims are women. Children in homes where there is domestic violence are more likely to be abused or neglected. Even if the children are not physically harmed, they are likely to have serious emotional and behavioral problems and scars.
Abusers try to control their victim’s lives. When abusers feel a loss of control – like when the abused person leaves them – the abuse may get worse. If you are in an abusive situation, take special precautions when you leave. Develop a safety plan.
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Attorney Mark A. Nacol is board certified in Civil Trial Law by the Texas Board of Legal Specialization