Monday, July 7, 2014

Tax Deductions

There are a number of factors the Court has to look at in order to determine who gets the income tax deduction in a custody matter.  
1. The value of the exemption at the marginal rate of each parent;
2. The income of each parent;
3. The age of the children and how long the exemption will be available;
4. The percentage of the cost of supporting the children borne by each parent; and
5. The financial burden assumed by each parent under the property settlement agreement in the case.
6.  The value of the non-economic but valuable contributions made by the custodial parent.
Louk v. Louk, 761 So.2d 878, 884 (Miss. 2000), and Laird v. Blackburn, 788 So.2d 844, 852 (Miss. App. 2001).

This is one area where it may be helpful to hire an accountant.  I had a case recently where the parties figured out with the help of some financial resources that letting the noncustodial parent claim the deduction and then splitting the refund was the best economic decision for both of them.  

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