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Sharing Child Support

ImageConsider the following scenario: A divorced couple with a child. The father pays child support payments to the mother, and the mother pays for daycare for the child. In this scenario, the mother gets the child tax deductions, and the father gets no deductions, yet both are paying towards the raising of the child.

Not only that, if the mother declares the daycare expenses as a deduction on her tax return it can reduce her child tax benefits. So it is a better deduction for the other parent.

The solution is for the father to arrange to pay for the daycare for the child. Then he is able to get a tax deduction for the expense. He can arrange to reduce his child support payments by the amount of the daycare expenses to the mother. The net money going for supporting the child is still the same.

The tax deduction for the daycare expenses would often equal or exceed the amount that the mother gets, and there is no reduction of child tax benefits.

 
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