2004 Federal Tax Law Benefits Parents of Divorcefirst posted on: 10/3/2004
New legislation by Congress has
granted additional federal tax relief to lower income parents!
On September 23, 2004, the Working Families Tax Relief Act of 2004
passed and the President has indicated he will sign this tax
relief law.
In certain divorced and separated families' circumstances,
these changes will affect the tax savings from claiming the
child dependency exemptions and under age 17 child tax
credits. Lower income “head of household” parents (parents
whose homes are the primary residence of a child) are
expected to receive a higher refundable child tax credit
(15% rather than 10%) under the new federal tax law.
Nationally recognized matrimonial accountant, Dennis Casty,
C.P.A., notes that this new federal tax law change most
often will benefit head of household parents earning less than
$25,000 annually, with two or more children and with some
child care expenses.
As in the past, collaborative tax planning in family or
divorce mediation often allows parents to save
substantial family monies. Often, especially in lower
income cases, allocating the dependency exemptions to the
non-residential parent can save both parties' significant
taxes (usually with the residential parent receiving some
“buyout” for this switch).
 We
are among those Colorado divorce professionals using
powerful software analysis tools, including those of Mr.
Casty (Divorce
Planner® divorce tax planning software — considered the
gold standard of such tools), to ensure our family law and divorce mediation
clients' the benefits of the changing landscape of federal
divorce tax laws.
(See also our website’s section on
Why Choose Mediation? for other compelling reasons to
consider mediation of your divorce case or parenting dispute.) Also consider our website's acclaimed Frequently Asked Questions and
Myths
resources, where we answer other
questions, and debunk commonly held misunderstandings −
regarding Colorado divorce laws, court procedures and
alternative dispute resolution alternatives, such as family
mediation.
Also, see our “Spotlight”
or other feature articles, where we discuss in detail other Colorado legal, procedural (including
divorce law and family mediation) or parenting topics. Presently, we look in
depth at:
An additional highly recommended
resource for Colorado divorce law information is
Colorado Springs, Colorado
family lawyer Carl Graham's Colorado Divorce and
Family Law Guide.
Return to home, or for other
news articles on Colorado divorce law and Colorado mediation issues, return to the index to our site's Colorado divorce law information and mediation news
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Finally, consider articles regarding changes at our office
in 2006 (the substitution of old-style flip-charts with
