It’s Tax Time & You’re Divorced

How do you determine who receives the dependency exemption for the children?

          To claim the dependency exemption the parents must be divorced or separated, have a separation agreement or have lived apart during the last six months of the year. Generally, only the custodial parent may claim the dependency exemption. Custody is determined by the number of overnights slept in the home of a parent. The parent having custody for a greater portion of the year is considered the custodial parent.

          There is, however, an exception to the custodial parent rule if both parents agree to the Tax Time Blogcontrary. A non-custodial parent may claim the dependency exemption for a child provided the custodial parent signs a release of the exemption for that tax year. The release is an IRS form that must be signed by the custodial parent and included with the non-custodial parent’s tax return.

          Check with your tax advisor about the effect signing a release may have on other deductions.

          Additional questions? Refer to the following link for more information  https://www.irs.gov/publications/p17/ch03.html#en_US_2015_publink1000204295

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As many of you are probably aware, the Governor has issued a stay at home order beginning today at 5 pm. As an essential business, we will remain open to serve our clients. During this time, many people will face legal challenges and be in need of services regarding issues such as divorce and child custody, estate planning, business law and real estate matters. We are here to help. In order to follow social distancing protocols, we are offering phone and video conferences and innovative solutions to sign your essential documents in a safe manner. We are all going through a difficult time and things are rapidly changing, but Perry, Bundy, Plyler & Long remains here for you.