You and your ex agreed to a joint child custody arrangement, and you want to remain present and provide for your shared children. How should you prepare your finances for this aspect of your divorce agreement?
Kiplinger offers tips for navigating the financial side of joint child custody. Learn how to help yourself and your children to peace of mind.
Use apps
To make it easier to keep track of childcare expenses, consider using apps. You and your former spouse may track spending for sports, school supplies and various other expenses incurred with your child in your custody. You may also use technology to pay each other back and sort out unplanned expenses.
Think about taxes
Only the parent who acts as the custodial parent may claim shared children as dependents on a tax return. The custodial parent is the one the child lives with for most of the year and the one who may claim the child tax or dependent tax credit. Also, only the custodial parent may claim head-of-household status, the health coverage tax credit and the earned income credit.
Consider health coverage for shared children
If you have yet to decide which parent covers your children’s health care, think about whether your child has a preferred health care provider and which parent’s insurance covers that provider. Depending on your plans, you may want to consider which parent’s plan provides the most favorable out-of-network coverage. You may want to use your divorce agreement to sort out healthcare costs.
Married or divorced, parents have a lot to think about regarding the financial aspects of being a parent. The right tips and insights help parents make well-informed decisions for their shared children.
