When it comes divorce or being an unmarried parent, who gets to claim your dependents can be a bit tricky. Here’s what you need to know.
Many times, divorced or unmarried parents can cause headaches because both parents attempt to claim their son or daughter as a dependent. The headache comes when the parent to claim the child second gets their claim rejected.
The basic rule imposed by the IRS is that the parent with whom the child spends the majority of the tax year with gets to claim the child. In the case of joint custody, or in the event there is an equal amount of time between the 2 parents, the parent with the largest adjusted gross income will be able to claim the dependent.
Although, a parent who has the majority custody of the child may opt to fill out an IRS form to allow the parent with less custody to claim the child. This can be done yearly or multi-yearly.
One problem that confuses unmarried parents is that rulings from family courts are not always in sync with the IRS tax laws. In some cases, divorce judges award a parent the right to claim a child even though they are not qualified to do so according to the Federal tax law, which trumps family court rulings.
We’re here to walk through your unique filing situations and we’ll make sure you get all the tax breaks you have a right to. Give us a call today!
Do you have the support you need to manage your small business bookkeeping?
Schedule a 30-minute appointment to speak with a local small business adviser.