I hope I can get some imput on this one.

My divorce will be official soon, although we still have some issues to present. At this time, since I have been a stay at home mom and not working much, my H is paying 90% toward child support,and I pay 10%. This amounts to $892 per month from him. I also will receive maintenence of $1000 per month for 12 months.

It states in the paperwork that H gets to claim the kids on income taxes. I don't have a problem with that at this time, as he is paying maintenence. However, at the point when I am working more, shouldn't we then trade off, or maybe just each claim one kid?

My attorney says that since he is paying more than $800 in child support I cannot expect to claim the kids. So when I go back to work, (which is now, although not full time) I get to work full time, raise two kids alone and not even get one deduction?

And, what if I choose to NOT work full time, and stay part time until the kids go to school and just get by. Isn't it my decision whether I want to have a lot of money or less, and more time with my kids, and how is that relative to whether I can claim the kids?

I hope some folks can chime in and help me get some ideas on this.

Country Mama

As you work more, your portion of the child support will go up and his will go down.

Isn't it my decision whether I want to have a lot of money or less, and more time with my kids, and how is that relative to whether I can claim the kids?
???
Claiming the kids as a deduction is based on how much financial support you provide. If you are not working, you are providing very little support, therefore why should you get to deduct it?

Okay, but what if I do go back full time? As a teacher, I will NEVER make as much as my husband, even with my Master's degree. SO at my full earning potential, and working full time, I may not claim them on taxes?

If you make more money, then you would have to go back to court and get the amounts changed (you would get less from him) and also get the decreee changed to reflect who gets to claim who.

Okay, thanks for your input.

I guess I'm just crabby, because I have a hard time with him getting ANYTHING when he just walks out on us like he did.

cm

CM,
For 2004, you and your H should probably file as Married, Filing Separately. He could claim the kids, and if either one of you chooses to itemize deductions, the other must also itemize.

If you didn't earn much money from your job, it's possible that you would get back all the witholding taxes you paid in. Any joint income (such as interest/dividends) should be split between your H and you.

For 2005, if you have full physical custody of the children (meaning they live with you for the whole 12 months, although having visitation with their father) and your earned income and gross income falls within the paramenters, you may qualify to file as Head of Household and for Earned Income Credit (EIC). You can list the children as living with you, although you cannot claim them as dependents, and get this tax credit in addition to any other refund you may be entitled to receive.

BTW, if you use a tax preparation chain, you may run into a problem with a preparer telling you that you can't get EIC because they aren't your dependents, which is hogwash. Bear in mind that most of these preparers just take a short 6 or maybe 8 week course before starting to prepare returns. If your finances aren't complicated, you can do just as well or better by using TurboTax or some other tax preparation software instead of using one of these services, which seem to charge an appalling amount for their services. Just do your research before buying any software.

BTW, you will get a break on filing status, evn though you can't claim the kids as dependents. Filing "Head of Household" gives you a better standard deduction than "Married, Filing Separately". And, depending on your income and your qualifying for EIC, you could stand to get a pretty good refund NEXT year.

LC

Thank You,

My attorney recommended we file 2004 as married, filing jointly, and split the refund. (we're not divorced yet)

I have always used Turbo Tax in the past, and already have my 2004 program. We have fairly simple taxes. We had sold our house 1 1/2 years ago, so already dealt with that. I bought a house by myself this fall, so have some interest for that, but very little.

We have always made too much money for EIC, so I never fully understood exactly what it was. You're saying i can get EIC, even if i'm not claiming them as dependents?

CM

One more question:

I am starting a new job tomorrow, how many do I claim on my W-2?

cm

Country Mama--

You can get it in your divorce papers that you claim one child--and he claim another--and it doesn't matter how much either one of you pays in child support--

my husband pays more in child support than his ex-wife makes--she claims both kids on the taxes--

My ex-h makes more than I do--he claims 1, I claim 2 on taxes--so I would check into this--because you should be able to work this out where you each claim one child--

You could work it that you claim the youngest, and he claims the oldest--or vice versa--

</font><blockquote><font size="1" face="Verdana, Arial">quote:</font><hr /><font size="2" face="Verdana, Arial">"We have always made too much money for EIC, so I never fully understood exactly what it was. You're saying i can get EIC, even if i'm not claiming them as dependents? </font><hr /></blockquote><font size="2" face="Verdana, Arial">As a married couple, I'm sure you and your H made too much money for EIC. However, after your divorce, you will be filing based on only your income, and based on that, you may possibly qualify for EIC. You do not have to claim the children as dependents to qualify for EIC (again, if your income also qualifies you), but they must live in your household for the whole year (visitation doesn't count against you here...not sure how joint PHYSICAL custody would affect you.). Joint LEGAL custody should not affect you. What is necessary is that you file as "Head of Household", provide a home for the children for the entire year and that your income fall within the EIC guidelines. Turbotax can "walk" you through this.

For 2004, you can either file as your attorney suggested and split the refund, or you BOTH can file "Married, filing separately". It depends on what works best for you.

As to how many dependents to claim on your W-4, I think it would depend on how much you expect to earn for the year and whether your income will fall within the guidelines for EIC. If your husband will be claiming the children, you could claim either "0" or "1" (yourself). To protect myself from having to pay in more at tax time, though, I think I would start out with claiming 0 and have the maximum Federal withholding taken out if your wages are substantial. What I would do is do a sample 2004 tax return using your projected income to see what kind of tax liability you might have and use that information to make my decision. If you will be getting a refund and need as much of your paycheck as you can get throughout the year, then I would claim "1" on my W-4.

Also, if and after you qualify for EIC, there is a provision to have "Advance EIC" paid to you in your paycheck. The only downfall is that if you are paid too much EIC or have a greater tax liability than expected, you would have to pay that overpayment of EIC back when you file. This is optional, however. I don't know anyone who chooses that option; they'd rather get a big lump sum when they file.

Hope I haven't confused you!
LC