When it comes to effectively lowering your child support payment obligations, one trick that is often overlooked is utilizing your pre-tax money and obtaining tax exemptions that will save you 30% or more in child support. Here’s a quick rundown of how to make this work for you!
First off, child support payments are made from your after-tax dollars-which means, in other words, your take-home pay. But if you’re paying maintenance (or alimony, depending on what your state considers it) to your ex, you’ll be paying this from your pre-tax dollars. This will essentially lower your final payments some 30% or more.
Along with deeming your “child support payments” as “maintenance” or “alimony” and having the money come out of your pre-tax dollars, you can also ask to obtain the tax exemption for the kids each year on your tax return. If your ex-wife will have full custody of the kids, she’ll be able to claim Head of Household on her taxes and receive the benefit of that, and so it’s only fair that you, in turn, get to claim the children and receive the tax benefits. This way, everyone wins and no one comes out too far ahead, yet you, as (more than likely) the one that makes the higher income will in turn receive higher tax benefits from doing so.
Together, these two tricks will help get the IRS to pay your child support payments, and can help lower your financial obligations while still keeping you “in the good” with your ex-spouse and the family courts.