Pre-Divorce
Details
Tax Filing Status: Married Joint
Gross Combined Annual Income: $120,000 ($60,000 Non-custodial, $60,000 Custodial)
Qualified Plan/IRA Contributions: $3,000
Health Care Premiums: $3,000
Childcare Expenses: $3,600
Itemized deductions: $24,000
Number of Personal Exemptions: 4
Number of dependents under 18: 2
Tax Calculation
Taxable Income: $120,000 – $3,000 – $3,000 – $4,000 – $25,000 = $85,000
Taxes: $10,417
Credits: $4,800
Net Taxes after credits: $5,617
Post-Divorce
Parent#1 (Custodial Parent)
Details
Tax Filing Status: Head of Household
Gross Annual Income: $60,000
Qualified Plan/IRA Contributions: $1,500
Health Care Premiums: $1,500
Childcare Expenses: $3,600
Itemized deductions: $14,000
Number of Personal Exemptions: 3
Number of dependents under 18: 2
Tax Calculation
Taxable Income: $60,000 – $1,500 – $1,500 – $18,350 = $38,650
Taxes: $4,361
Credits: $4,893
Net Taxes after credits: -$532
Parent#2(Non-Custodial Parent)
Details
Tax Filing Status: Single
Gross Annual Income: $60,000
Qualified Plan/IRA Contributions: $1,500
Health Care Premiums: $1,500
Itemized deductions: $10,000
Number of Personal Exemptions: 1
Number of dependents under 18: 0
Tax Calculation
Taxable Income: $60,000 – $1,500 – $1,500 – $12,200 (Standard Deduction) = $44,800
Taxes: $5,715
Credits: $0
Net Taxes after credits: $5,715
Effective Tax Rate: $5,715/$44,800 = 12.76%
Child Support Award (monthly)
Monthly Combined Income:
BCSO: $1,749/month
Pro-rata share: $874.50/$874.50
Child Care Expenses: $3,600
Pro-rata share: $150/$150
Healthcare Premiums: $1,200
Pro-rata share: $50/$50
Total Pro-rata (non-custodial): $874.50 + $150 + $50 = $1,074.50
Overall, taxes drop post-divorce. However, wife’s portion of taxes drop by $278.38 per month while husband’s portion of taxes increases by $242.21.
Total taxes percentage paid by non-custodial = 12.76% + 7.65% = 20.41%
To get $1074.50 net, non-custodial parent must make $1350.04