When Florida service members are going through divorce, often the last thing on their minds is the manner in which their tax scenario will change once that process is finalized. However, in order to make the best possible decisions during a military divorce, it is important to consider a number of financial matters, including tax obligations. Working through the outcomes of various decisions can help spouses make choices that are in line with their long term goals.
One issue that many parents are unaware of is how a divorce will impact their ability to claim their children as dependents on their taxes. In most cases, the parent who assumes primary custody of one or more children also assumes the right to claim those children on his or her tax return. Is important to understand, however, that such an outcome is not dictated by law or the Tax Code.
Parents are able to negotiate which party will have the right to claim a child on his or her tax return as part of the overall divorce process. In many cases, claiming dependents is far more advantageous to one party than the other. In fact, there are circumstances under which allowing the noncustodial parent to claim one or more children on tax returns can lead to significant savings.
It is important to include these discussions during the negotiation stage of a military divorce. Once a divorce is made final, it is very difficult to revisit the issue. A tax professional or financial advisor can be instrumental in determining how advantageous having those deductions would be on each spouse’s tax obligation. That information can make it easier to negotiate a military divorce settlement that is fair and favorable to all Florida parties.
Source: madison.com, “Getting Divorced? Here Are 4 Ways Your Taxes Will Change“, Wendy Connick, Sept. 24, 2017