Tax season is upon us, so now is the time to begin thinking about how financial aspects of your life, such as child-related expenses, can impact your taxes.
Here are some general rules of thumb when it comes to taxes and dependent expenses and benefits:
- Government Economic Stimulus Payments – These are not taxable. The government pays the stimulus to the parent who claims the child as a dependent for their taxes. However, both parents may choose to share it, especially if they have joint custody.
- Child Support – Child support is not taxable. The tax is paid when it is initially received by the party who earned the income. The support payment is not taxed and is not reported on tax returns as taxable income.
- Claiming a Child as a Dependent – The parent who has primary custody of the child usually claims them as a dependent on their taxes. There are exceptions, such as if the parents agree to a different arrangement or if a judge orders an alternative situation. In those cases, the IRS usually requires the custodial parent to sign a waiver recognizing that the other parent is claiming the child.
- Tax Deductions for Educational Expenses – There are potential tax credits and/or deductions for some education expenses and for contributing to college savings plans, such as a 529 college savings plan.
Some child-related tax benefits are capped or reduced for higher-income earners. In those cases, a parent may be able to use those benefits as an additional value to allocate in a divorce or custody proceeding to assist with a settlement.
Seth Harris, a senior associate at the PMK family law division, is available to help you work through any issues related to divorce and child custody, as well as all family law needs. For more information, go to https://www.hawaiilegal.com/practice-areas/family-law-2/.
Note: The attorneys of PMK do not provide tax advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax advice. You should consult your own tax advisors before engaging in any action.
The Family Court is seeing an increased backlog of unresolved cases, especially because of the complications created by the COVID-19 pandemic. Hearings – even those deemed urgent – are being scheduled months out. Even more so than in the past, the court is encouraging people to seek alternative dispute resolution (ADR) to avoid what can be a months-long wait for a hearing. Alternative dispute resolution can also be less expensive than going through the Family Court.
Parents or spouses can use alternative dispute resolution to navigate divorces, and custody or child support disputes.
Forms of alternative dispute resolution include:
- Mediation – The parties work together with a trained mediator to facilitate conversation and resolution.
- Arbitration – The parties hire a family law attorney or expert who acts as a private judge to resolve the remaining disputes.
- Custody Issues – Third-party evaluators, such as a Family Court-approved, licensed, trained custody evaluator, can determine what arrangement is in the best interest of the child.
Seth Harris, senior associate at the PMK family law division, can help determine if alternative dispute resolution is a good option for you. For more information, go to https://www.hawaiilegal.com/practice-areas/family-law-2/.
PMK partnered with HUGS to sponsor a Dad’s Night Out on December 15th. HUGS is an organization that helps strengthen Hawaii’s families and improve their quality of life as they face the emotional and financial hardships of caring for a seriously ill child.
The dads enjoyed a virtual night of fun playing “Are You Smarter Than a Fifth Grader?” The teams and had fun testing their trivia skills with a little friendly competition and enjoyed a takeout meal from Zippy’s. They were thankful to have a night with others in similar situations and some much-needed social time.
To learn more about HUGS, visit https://www.hugshawaii.org/
As in year’s past, PMK has elected to close our office from December 24th – January 2nd to allow our staff and associates to spend time with their families. We wish you a very happy holiday and look forward to working with you in 2022. Mele Kalikimaka and Hau’oli Makahiki Hou!
For many of us, the winter holidays are something to look forward to. Plentiful food, surprise gifts, and especially family get-togethers are all part of the festivities. But for divorced couples who co-parent, the most wonderful time of year can also be extremely stressful. However, there are some practical ways to minimize the pressure.
Read on for six tips to make it a joyful holiday season for you and your kids!
- Follow the court orders
Court orders are binding. If you defy them, you will be judged on your non-compliance, regardless of the situation, including anything your former spouse may have done to provoke such an action.
2. Don’t bite off more than you can chew
For some people, the holidays create a feeling of being pulled in multiple directions at one time. As always, there are work obligations, but you may also be grappling with responsibilities to your extended family.
Maybe you would like your children to visit with you for two weeks, but there are practical concerns that could make this difficult. How much time can you be present with them when they are not at school? How much time can you take off from work? Can a family member help? If not, can you afford to hire a babysitter? Regardless of your situation, be sure to have all your ducks in a row and don’t take on anything that you can’t handle, emotionally, practically, or financially.
3. Seek solutions
Don’t wait for problems and conflict to arise! Seek to find solutions that work for both you and your spouse, so that both sides get the time they need and want with the children as much as reasonably possible. Remember to be flexible if you need to. Going to court for dispute resolution should be a last resort.
4. Prioritize
For some families, Christmas morning is the most important event. For others, Christmas Day is more cherished. Seek to balance your family traditions with your spouse’s but remember that it is your children’s needs that are paramount, and they will vary depending on their age.
For example, you may believe that you must take photos of your toddler opening their gifts on Christmas morning, but a two-year-old is just as happy to celebrate on the 26th.
5. Do not argue with your spouse in front of your children
Children are extremely intuitive and parental conflict creates stress, anxiety, and worry regardless of their age.
6. Remember – no single day makes or breaks your ability to be a good parent
Even if your children are with your former spouse on Christmas Eve, Christmas Day, and the day after, and you can’t see them until the 27th, they won’t love you any less.
Whatever your needs when it comes to co-parenting, Seth Harris, senior associate of the PMK family law division, can guide you through the legal process to ensure an outcome that is in the best interest of your child. Contact him at [email protected].
If you have any questions or inquires, please fill out the form below and we will be in touch with you shortly.