Do not split the medical care costs of children with a former spouse. Continue to share the costs, but identify which parent is most likely to obtain a medical expense deduction. That parent should actually pay the children’s medical bills for the year. Alternatively, one of the parents can pay the bills one year and the other pay the next year.
The parent reduced their taxable income by $5,000 by not splitting the medical care costs of children with a former spouse. Since the parents income was taxed at the 30% tax bracket, the income reduction may decrease their income taxes by $1,500 ($5,000 x 30%).
If you are in a combined (federal, self-employment, and state) tax bracket of 30%, you could reduce your taxes up to $300 for every $1,000 of income reduction by not the splitting the medical care costs of children with your former spouse.