Tax Implications of Divorce

In a recent blog post, I wrote about the use of a financial specialist in collaborative divorce to assess the impact of financial decisions throughout the divorce process.

This article, from DivorceInfo, highlights the impact of one issue -- the child tax exemption -- in divorce financial planning. It explains how the child exemption may be worth "more" or "less" to one parent in the divorce, and what IRS forms are required to transfer this deduction. (The custodial parent will have to complete an IRS form 8332 to allow the non-custodial parent to claim the exemption.) It also outlines some standard language which can be included in the divorce agreement to revoke the transfer, if the non-custodial parent (male or female) is not current on child support or other obligations.