Who Claims the Children as Dependents for Tax Purposes?

About this time of year, separated parents sometimes ask us who can claim the children on their taxes.  Many parents simply agree that the parent that would get the most benefit can claim the children.  Other parents have provisions in their orders directing the parties to claim or not to claim the children on their taxes.  But what about when there is no agreement?

The position the IRS takes is that the person having the children more than half the year can claim the children.  IRS Publication 504.

This means that the custodial parent, or the parent the children live with primarily, can claim the exemption.

So what happens if your orders say that one parent gets to claim the children and the other parent files first, claiming the children?  Realistically, the parent that should have been able to claim the children is going to have a hard time.  They will need to work with the IRS, the other party, and possibly an attorney well-versed in tax law to correct the issue.  The parent could also file an enforcement action or sue for the lost benefit.  The easiest way to avoid the issue?  Speak with the other parent, or make sure you file first.

What is a social study?

When parents can’t agree on who the kids will live with the Court will normally order a social study be conducted. This allows for a non-party, a trained professional, to look at the situation, the concerns of each party, and make a recommendation to the Court.  That recommendation is the social study.

This expert will interview each party as well as watch the interactions between the parties and the kids. They will normally also interview other children or adults that are living in the residences of the parties (should there be any) and do a home visit of each parties home to make sure it is appropriate / safe for the children.

Once the expert is done, they draft the social study. In some jurisdictions, only the attorneys and the judge will see the result.  This is because there have been times when parties have not liked the results of the social study and either share them with the children or even take out their frustrations on the children.

If you are going through a social study, be honest, participate fully, and make sure you comply fully with any requests. Talk with your attorney if you have questions.

A quick overview of the process in Dallas County can be found here.

What Would My Texas Child Support Be?

Ever wonder how much you would pay in child support in Texas?  The Texas Office of the Attorney General has on online child support calculator that gets pretty close to figuring out what your child support obligation would be in Texas.  The actual number may vary, but this will give you a good idea -

LINK TO TEXAS CHILD SUPPORT CALCULATOR

Contracts with Lawyers (2 of 3)

Post two of three deals with flat fee contracts.  These are the simplest contracts.  You pay the lawyer a set amount for a legal matter and that is it – no variance for how successful or not the case turns out.

Flat fee contracts are typically used for situations where the legal work/time/fees needed is easily determined.  Common cases would be a no-contest divorce or a criminal matter.

The problem with flat fee contracts is that most are nonrefundable, and the contract spells out the terms of the representation.  If your case evolves outside of the contract, you lose that money and the representation.  For example, you pay a flat fee for a no-contest divorce, then it becomes contested.  At that point, your lawyer is free to step out because the contract states his representation is only for a no-contest divorce, which no longer applies.  Should a situation like that arise, most lawyers are happy to renegotiate the contract, but do not expect another flat fee!

As always, read the contract closely.  Each contract can vary so pay close attention to the terms.  If you have a question, ask!  Your lawyer would rather have you understand the contract and the process up front so that both of you know what to expect.

Retainer Contracts: Contracts with Lawyers (1 of 3)

Contingency Fee Contracts: Contracts with Lawyers (3 of 3)

How to Change Contractual Alimony

First, make sure the clause you are looking to change is contractual alimony and not spousal support. You can get an idea by looking at my post here.

If it is contractual, read on!

Changing contractual alimony in Texas is not easy. It follows contract law, so typically you need the written agreement of both parties.  You need to look carefully at the terms and conditions of the payments first, and see if there is a built in way to modify or terminate the payments.  If not or the terms do not apply, you are going to need to talk to the ex-spouse.

Why would an ex-spouse agree to change the spousal payments?  Sometimes out of the goodness of their hearts… or perhaps you offer them something of value – some ideas:

  1. More money over a longer period of time so that the payments are smaller;
  2. Less money but in a lump sum payment;
  3. Other property can be used as well; or
  4. An offer to pay off debts incurred jointly or by the other party during the marriage.

We have also seen other consideration given, like the addition/modification of a geographic residency requirement or exchange points.  In the end, the deal is up to the parties, with very few exceptions.

Another method would be to attack it as you would a contract.  This is much more involved, and more difficult.

If you have a question or want advise about a particular situation, email or call – we can help!

Standard Possession Order for 2013

Since we started a new year, I thought the most useful thing to do was post a link to a standard visitation calendar for 2013.

Click OAG’s 2013 SPO Calendar

Of course, the above calendar won’t take into account all of the summer visitation or school holidays – you will have to spend some time doing that.  Here is a good website to help.

Last, click here for a more in-depth discussion of the Texas Standard Possession Order.

Wage Withholding for Contractual Alimony – No longer!

A Texas Court of Appeals held that a wage withholding order cannot be used to collect contractual alimony.  This adds yet another difference between court-ordered spousal maintenance and contractual alimony for both clients and lawyers to know about and discuss.

The full opinion can be found here.

The most interesting part is that this invalidates Texas Family Code §8.101(b) to the extent it authorized wage-withholding for contractual alimony.  The basis?  Unconstitutional under Texas Constitution Article XVI, §28, which states that current wages for personal service are not subject to garnishment, except for the enforcement of court-ordered child support or spousal maintenance!

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