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Adding Up Child Support Expenses

May 18, 2023
child support, Co-Parenting
Adding Up Child Support Expenses

Child support covers the basic necessities for children, such as food, shelter, and clothing. Courts calculate payments based on different factors unique to each case and state, but most consider income and custody time to determine what’s fair.

However, if co-parents can strike a bargain with one another, the court system often goes along with it. Conflicts decrease, and co-parents avoid investing additional money, time, and emotional turmoil into further legal proceedings.

Money Challenges Facing Co-Parents

Many challenges arise when exes must put their heads together to devise a way to divide shared parenting expenses. Divorced couples who split because they had trouble getting along must now communicate and agree over money matters – that isn’t easy to do on less-than-favorable (or zero) speaking terms.

Additionally, what was once a united income pot has been split, and not necessarily in a nice and neat, even 50/50 kind of way. How do you and an ex pool funds from separate accounts to make spending fair?

And what about transparency in spending? A co-parent doesn’t have to account for how they use child support money which could naturally lead to suspicions and hostilities.

The #1 Most Important Tip

The most vital thing co-parents should do to make their finances easier is download a shared parenting app (sometimes called a child support app or co-parenting app). These apps make the financial part of co-parenting simple.

First, requesting and paying money to the other parent is easy. Second, communications are professional and businesslike, with little need for talking or texting. Third, transparency keeps everyone updated and honest – co-parents upload pictures of bills and receipts for reimbursement. And fourth, financial information is securely stored within the app, making it easy to keep track of money-related matters for personal and legal reasons.

Five Spending Buckets

Taxes

Divorce and separation impact many parts of taxes. For example, claiming Head of Household (HoH) on taxes can reduce taxable income versus filing single with no dependents. If there’s one child in the family, it may be suitable for co-parents to alternate years of claiming HoH. If there’s more than one child, both parents can claim HoH.

Income can be a determining factor. For instance, if one parent earns no income, claiming a dependent on their tax return isn’t helpful.

The parent with the most custodial time in a year (more than 183 nights spent with a parent) could determine which claims dependents or HoH status. Custodial parents can claim childcare credits on taxes, whereas the non-custodial parent cannot, no matter how big a portion of it they pay. Legal and tax professionals can help you determine the most mutually beneficial way to share tax credits and burdens.

Education

Education can be a contentious subject because of the uncertainty of the future. What will the parents’ incomes be? Where will children attend school? How much is too much to pay for education, and how high will education costs rise?

The best way to handle this uncertainty is by spelling out expectations in the divorce decree. Determine which aspects you’re willing to pay and how long you’ll pay for your child’s secondary education.

Opening and regularly contributing to a 529 college plan has worked well for most co-parents. It’s best if each parent has their own 529 plan to invest as much and aggressively as they want.

Insurance

Different families have varying needs regarding medical, dental, mental health, and special abilities of individuals in the family, so there’s a wide range of solutions for this bucket. Some co-parents split expenses based on income. Some adjust child support payments based on which parent carries the children on their insurance policy.

Extracurriculars

Agreeing on these “nice to have” extras can be challenging for co-parents. No matter what, one parent shouldn’t financially obligate the other. If it’s your idea to put your child into a particular sport or activity, then it’s up to you to pay. However, if you and your co-parent agree that the hobby is mentally, academically, or socially beneficial, you can discuss splitting costs and transportation.

Recognize that a co-parent may not have the means to pay. Even paying a percentage would put a financial strain on them. If they believe the cost is unjustified or downright disagree with the decision, then the responsibility rests with you.

Arranging transportation to and from practices and events also falls on you. You cannot force the other parent to help, especially if it imposes an undue hardship.

Clothing and Miscellaneous

Price, quantity, and quality of clothing and shoes often cause disputes. Co-parents must establish what’s reasonable or concede that each buys as they see fit without discussion or reimbursement.

Future expenses such as vehicles, gas, and weddings also fall into this category. Co-parents can agree to percentages and limits or cap spending over a certain dollar amount until the other co-parent has approved.

Tips and Tech to Make Shared Expenses Easier

Whether court-ordered or co-parent negotiated, child support only covers necessities. The waters become muddy and solutions less apparent when the inevitable but variable additional expenses of raising children pop up. It’s helpful for co-parents to break their current and future expenses down into five different buckets and then discuss the following four aspects:

  1. How they’ll define necessities that go above and beyond primary child support funding
  2. The changing needs of their children
  3. Who pays whom
  4. With what frequency they’ll share bills and reimburse payments

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