The rules and regulations of the structured settlement are more like under an IRS. Every day there are divorce cases and settlement made though the attorneys and courts. There are many rules made and one of the IRS ruling issued in 2008, was that there are certain sell annuity payments tax benefits that both parents are entitled to, regardless of which parent claims the dependent exemption. When it comes to tax breaks both the parents can treat the child as a dependent. The divorced or the divorcing people need to know this. Whenever a couple separates or decides to separate having kids then there are lots and lots of issues, these issues need to be sorted out in the court and as a result one of them may also end up in some sort of settlement. There are many expenses and are not easy to manage alone. Whatever the decision you make; make it on the behalf of the betterment of the both parents, even though you are not together anymore but still try not to pull each other’s Sell Structured Settlement legs. The divorcee agreements can be beneficial for both, especially if it is the tax breaks related to a kid. There are many benefits for both, and some of the tax break benefits that the parents will have are:
- There will be the tax-free employer reimbursements for medical expenses: it sure is a great benefit after all, the taxes getting reduced or discounts offered on medical bills because of this settlement. A great benefit for sure.
- There will also be a tax-free treatment for employee discounts and no-additional-cost services: this for sure is another great benefit that you will have from the tax breaks when getting a divorce and it works for both the parents for that child. A great benefit for sure
- There are also tax-free distributions from (MSA) medical savings accounts this is when the distribution is used to pay the child’s qualified medical expenses
- There are many other tax advantages too such as the tax-free employer provided coverage under a health plan
- You get to have, or in this case both the parents get to have the tax-free distributions from health savings accounts.
This rule only applies to parents who are
- legally separated
- or live apart at all times during the last six months of the year
- and the following tests are met:
- If and only if over half of the child’s support during the year is provided by the child’s parents
- The child is in the custody of one or both parents for more than half the year
- The child is a qualifying child or qualifying relative of one of the parents