Claiming ‘Head of Household’ Status, Dependent Children During Divorce

by Alex Kwoka, Attorney at Law, Law Office of Alexandra M. Kwoka

If you are considering separating or divorcing,  and/or moving from the marital home with a child or children, thinking about how you will file your tax return is important.

First:  When will you separate into two households?

If you move out after June 30 in the tax filing year, you will not be able to claim either “Head of Household” or “Single” tax status, which means your tax rate may be greater than when you were married if you filed jointly.

IRS regulations permit parents who are not yet divorced or separated under a Judgment to file as Head of Household (if they meIRS 1040 Tax Formet certain requirements).

HH status is  a benefit to a parent, because filing as HH generally results in taxation at rates lower than “Married filing separately” or Single.

To file as Head of Household, at least one child must live with the taxpayer. The taxpayer must “maintain the household” by paying for housing, utilities and food.  The household must also be “the principal place of abode” of the child, which means the child must live with the parent for more than half the year according to IRS Regulations.

Because of this, be cautious in describing your custody arrangement if you are thinking of sharing custody of a child or children. If you are planning on being the Head of Household, as a parent  you may need to prove that you maintained a household for a child AND had approximately 51 percent of custody time. If you and your spouse share time equally or 50/50 you may not be able to qualify for HH status.

Even if there is no Court order determining custody, if you and your spouse are NOT living together for the last six months of the year, and you maintain a household for a child or children, you may qualify for HH status AND a child care credit if you file a separate return and meet the other requirements.

California law permits a taxpayer to claim a “joint custody Head of Household credit” if parties have lived separately for an entire year, AND a child lives with a parent no less than 146 days and no more than 219 under a written agreement or a Judgment or order. The law may be different in another state.

Second:  Who will claim your child or children as dependents?

IRS Regulations permit parents who have elected to separate or divorce (and taken steps to separate/divorce by moving to separate households) to not only claim one of several tax status when tax returns are filed, but also to decide who will claim a child or children as a dependent.

Claiming a child as a dependent means you claim a “dependency deduction,” also called a  “dependency exemption.”

The deduction/exemption means that the amount of the dependency exemption is deducted from your income. It reduces gross income in the calculation to arrive at taxable income.

In tax year 2013, the eligible dependency exemption is $3,900 unless a taxpayer is subject to Alternative Minimum Tax; or the deduction is reduced because his/her adjusted gross income exceeds $300,000 on a joint return, $275,000 on a HH return, $250,000 on a single return, or $150,000 on a married filing single return.

This means if you are a taxpayer in the 28% bracket in 2013, a $3,900 exemption is worth $1,092.

To claim a child as a dependent:

  • The child must be under 19 as of 12/31 of the tax year OR be a full-time student under the age of 24.
  • The child must be a dependent – i.e., live with the parent for more than one-half of the tax year.
  • The parent must provide support for the child.

If a child lives with both parents, or one parent is the parent with physical custody  under a decree, order or Judgment but both parents claim the child as a “dependent,” the IRS determines who is the “custodial parent” by looking for proof.  The IRS will determine which parent was the one with whom the child resides for the greater number of nights during the calendar year.

A parent with custody can “release” a dependency exemption for one or more children to the other parent by signing and filing  IRS Form 8332. It permits a custodial parent to release the exemption for one year, for several and/or future years, and to revoke the release. The non-custodial parent can then claim the child as a dependent by attaching the signed form to his or her tax return.  IRS Form 8332 explains the rules for children of divorced or separated parents, and is available online.

The Child Care Credit

If a parent can claim a child as his/her dependent and if the parent has child care costs for this child (who must be under age 13) IRS Regulations also permit the parent to claim a child care credit if he/she is the custodial parent.

But a non-custodial parent  to whom a dependency exemption has been released can NOT claim on her/his federal tax return a child care credit.  The custodial parent alone may claim the child care credit.

The amount of the child care credit depends on the claiming taxpayer’s income.  And, expenses which can be claimed are capped: $3,000 for one child; $6,000 for two or more children.

Because these rules and conforming with them to the satisfaction of the IRS can be complex and involve a significant amount of tax savings, it is wise to consult your tax professional if you have any questions or concerns.

Division of Marital Assets in Divorce: Fairness and Respect

A recent Forbes Magazine article offers advice specifically to women about assets in a financial portfolio that they might overlook when working on the division of those assets in a divorce.

From a practical standpoint, it’s true that people don’t always clearly identify or think about all of their “assets” at the time of divorce. But those of us involved in the Collaborative Divorce approach believe the focus of a divorce should not be oDivorce and Fighting, Boxing Glovesn “stuff.”  Advocates of Collaborative Divorce focus on the process of making good decisions without alienating one partner from the other and coming out at the end with respect and with the relationships among members of a family preserved moving forward. Simply because two parents will no longer be married doesn’t mean family ties vanish.

It is also troublesome that there are still individuals addressing women in this way, reinforcing an unfortunate stereotype that we firmly reject. Collaborative Divorce is about fairness, cooperation, and equal treatment whether for men or women, whether in traditional or same-sex marriages.

If you’re considering divorce, consider the healthier alternative provided by a Collaborative Divorce. Contact one of our members to learn more about the Collaborative Divorce process and how it can benefit you and your family. A divorce doesn’t have to be a fight, and it doesn’t have to hurt.

 

 

Brave New World of Divorce: Alimony For Your Eggs?

Divorce is never a happy situation. But it can be especially difficult for women who would like to become mothers and face an expiration date on their fertility.

Baby CupcakesReproductive medicine provides many more options for people who wish to become parents. But this can also complicate a divorce. Fertility preservation could now become an issue in divorce if a New York family law case sets a precedent.

CFLGSD member Mel Mackler shares this article from the New York Times on September 7 about the case; read it at this link. How do you see this playing out in the courts and in divorce in the future?

Tips for Empty Nesters When the Kids Leave for College

Many parents are working through the transition in their lives created when their children leave for college. As CFLGSD member and family law attorney Julia Garwood notes, things change. They no longer know when the kids are home, whether they are eating or sleeping properly, who they are hanging out with, and other everyday activities.

Many couples find themselves in the situation where the kids are gone and they are left with a spouse that they no longer know – except in relationship to the children. It can be a crucial time in your marriage. Unfortunately, some empty nesters find themselves contemplating divorce or separation because they’ve spent so much time being parents that they forget how to be lovers. But it doesn’t have to be that way.

College Empty NestersGarwood has excellent advice for parents who might feel confused or even overwhelmed by the changes created due to your child’s new “freedom,” and your own new “freedom” as a result. Read her excellent tips here to help survive the transition to becoming a happy empty nesting couple.

 

 

Survey: Single Fathers Head Record Number of Households with Minor Children in U.S.

A record 8% of households with minor children in the United States are headed by a single father, up from just over 1% in 1960, according to a Pew Research Center analysis of Decennial Census and American Community Survey data.

SDT-2013-07-single-fathers-01The number of single father households has increased about ninefold since 1960, from less than 300,000 to more than 2.6 million in 2011.

The entire Pew Research study can be found at this link. There is a tremendous amount of data offered in this study which could be useful to anyone dealing with issues affecting families including divorce, custody and support issues.

Have you run across this trend in your own professional experience? Tell us and add your observations in the comments section.

How to Find the Divorce Process That Works for You

by Mel Mackler, MA, LMFT
Coaching and Education for an Emotionally Healthy Divorce

Divorce: You have choices

When it comes to divorce, many people hire an attorney out of anxiety. They feel compelled to get advice or protection, often before they’ve discussed the situation with their spouse or partner.  Once the discussion is on the table, a spouse may feel compelled to seek immediate protection.

How do most people choose an attorney? It’s often by word of mouth: friends who have used an attorney, a friend who practices law, or a recommendation from a family member.  While the advice may bring quick relief by reducing anxiety, the advice is frequently biased and won’t necessarily take into account the individual needs of the person or their family.

Most people don’t realize that when they retain an attorney, they are not only hiring a personality, they are also buying a divorce process.

In California, there are four different methods that can be used to attain a divorce.  Typically, attorneys specialize in one of these processes although they may have experience working with more than that one specialty.  And each process has its merits and costs—financial as well as emotional.

If you’re considering divorce, become familiar with each of theses of processes before you retain your attorney. Think about which process fits the emotional make up of your family and which can offer the kind of emotional support you imagine your self, your spouse, or your kids needing.

Divorce is a process of negotiation and communication so you’ll want to think about the skills you and your partner share.  Are you able to have productive conversations when there are differences of opinions?  Do each of you have the capacity to manage your anxiety when tensions build so that you stay focused and can come to a rational agreement?  Is there a balance of power in your relationship or does one person tend to dominate?

In many communities there are divorce educators and divorce coaches who can lead you through the process of determining which process would best suit your family make up.  They will give you referrals to attorneys who specialize in the process you decide is going to be best for your family.  They can also help you to understand the financial costs associated with each process.

Become an aware consumer before retaining an attorney. If you and your spouse or partner can go through this process together and mutually choose a suitable divorce process, all the better.  This would be a great beginning to what I hope will be a cooperative and constructive future.  It may also help indicate what processes are compatible with your and your spouse’s abilities.

Sperm Donor Being Pursued for Child Support

Family law attorney and CFLGSD member Myra Fleischer discussed a Kansas child support case making national news in this interview with NBC 7 San Diego. In the case, a man who participated in a private donation arranged via Craigslist to a same-sex couple is now being pursued for support after the biological mother applied for public assistance after being unable to work due to medical problems. Since the laws in Kansas and California are similar, while the case is unusual it could happen here. See Myra’s interview in the video window below.

Who Is A Parent in 2013?

by Frank X. Nageotte, CLS-FL

Faced over the last 30 years with rapid advances in the science of human reproduction and fertility, DNA analysis, and genetics, the equally rapid evolution of the legal rights of gay and lesbian individuals, and significant changes in social views regarding traditional marriage, same-sex couples, and families, the law throughout the United States has been forced to wrestle with the question of just exactly “who is a parent?”

The New Normal: Who Is a Parent

The New Normal: Who is considered a parent under the law in 2013?

The traditional “nuclear family” consisting of a married man and woman with children to whom they are connected by either biology or adoption is no longer the only family structure with which the courts must deal.  In some states, same-sex people can marry. Many other states have some form of Registered Domestic Partnership (“RDP”) for same-sex couples.  Of course, many couples (straight and gay) have children without being married or RDPs.  As a result, the definitions of “family” and “parent” have broadened significantly.

It is now legally possible in many states for a person who has no biological connection to a child, who has not adopted the child, and who is not married to (or an RDP with) the child’s biological parent, to nevertheless be found to be a “parent” of that child.  These cases often arise in connection with the break-up of a same-sex relationship.  However, disputes over parentage also arise between biological parents and stepparents, between surrogate mothers and the parties with whom they have contracted, and between sperm and/or egg donors and the recipients of their genetic material in cases of in vitro fertilization or artificial insemination.

In these cases, the courts are called upon to determine and evaluate the “intent” of the parties, the terms (if any) of their contract or agreement, the roles that they each have played in the child’s life, the existence and nature of a parental “bond” between each party and the child, and exactly what form of “family” will best meet the child’s interests and needs.

These cases are by their very nature extremely emotional and often heart-rending.  Resolving these cases through litigation can be quite expensive, especially since appeals are often necessary given the unsettled nature of the law in this area.  As is generally true with regard to all family law cases, our civil litigation system is very poorly equipped to handle these deeply personal issues.  Collaborative Family Law, with its team approach, use of appropriate experts, confidentiality, and focus on problem solving, is a much better process for these cases.

Why Collaborative Divorce is a Better Option for Parents and Their Children

By Debra N. Caligiuri, attorney and mediator, CFLG San Diego Member

January is International Child Centered Divorce Month – a whole month dedicated to alerting parents about the effects of divorce on children and teaching them how to prevent emotional and psychological damage to children during and after a divorce. One of the named promoters of this concept is a helpful website, Our Family Wizard.

Our Family Wizard Website

The Our Family Wizard website can make parenting after divorce easier for everyone.

Our Family Wizard provides child custody and co-parenting tools to divorcing couples. Parenting between two people who are no longer a couple, and not in the same home, can become complicated. The Our Family Wizard website is an effective, common sense way for you and your co-parent to create parenting schedules, communicate important kid-related items with your co-parent, and make and keep a record of shared child-related expenses.

San Diego Family Court judges frequently recommend (and sometimes order) parents to make use of the tools Our Family Wizard offers. Their goal in providing positive resources for parents is to improve the lives of children of divorce. My clients who use the site appreciate its simplicity and cost-effectiveness.

Most parents are aware that how you conduct yourself during and after the divorce process will impact your children for years to come. Studies reveal that divorce does not necessarily harm children, and in some instances may improve children’s lives. But there is no doubt that a high level of conflict between you and your spouse can seriously damage your kids.

Fortunately, divorcing parents now have options and resources available to help keep conflict with one another to a minimum. They are no longer stuck with going through an adversarial divorce in a court of law, with attorneys who are profiting off the conflict. Instead, they have options. Among the best: choosing attorneys who promote the childrens’ best interests by offering a collaborative approach to divorce. With the appropriate level of professional expertise and support, you and your spouse are able to focus on what truly is important to your family’s lives.

Choose collaborative. Your children will thank you for it.

Contact Debra N. Caligiuri at www.caligiurilaw.com or call 760-477-8595.

Sperm donation, parental rights, and the law: Column by CFLGSD member Myra Chack Fleischer

Sperm-Donation-Paternity-Child-Support-Law

Can a sperm donor end up on the hook for child support? The case of Kansas sperm donor William Marotta has raised numerous questions about the potential obligations of a sperm donor who never intended to be a legal parent to a child. Laws do vary from state to state; the law in California is similar to Kansas. The issue in this case arose after a same-sex couple separated, and no second parent adoption took place.

CFLGSD member Myra Chack Fleischer, lead counsel with Fleischer & Associates, explored the many issues raised in this case in her latest column for Communities Digital News at the Washington Times. Read more here. What implications does this have for your clients?

Read more: http://communities.washingtontimes.com/neighborhood/legally-speaking/2013/jan/17/daddy-sperm-donors-paternity-child-support-law/