Texas single parents have many concerns especially when it comes to taxes. Head of household status offers major advantages for unmarried parents who earn half or more of the household income and have their children living with them for at least six months of the year. Furthermore, either a custodial or a non-custodial parent may claim one or more child as a dependent.
Each legal dependent has a possible $3,950 deduction, depending on the parents annual income. There is also a tax credit for each child under 16 when the household income is $75,000 or less. The Earned Income Tax Credit, is another tax break that benefits people with three or more children. Because of the availability of these deductions, tax issues should be taken into consideration during child custody proceedings.
In some cases, child care expenses, such as daycare, after-school programs and day camps, may be deductible. Many parents work for companies that offer dependent care spending accounts, and these are deductible. Lastly, a parent who has adopted a child might also be eligible for a specific tax deduction. All of these deductions may be able to help a parent financially after a divorce.
Couples who are going through a divorce, who also have children, have several important considerations to keep in mind. Tax issues are not the least of these concerns. Knowing what tax deductions are available makes a major difference for both parents. When parents are trying to determine what sort of custody arrangement to use, taking tax credits and the respective income levels into account is necessary. Contacting an attorney is a good way to get advice to help ensure that these decisions are made properly.