Working on taxes is never a fun task, and being a single parent adds an extra layer of challenges to your taxes. Here are a few tax tips that will help you reduce your taxes as a single parent.
File As Head Of Household
If you are a single parent, instead of filing as a single person, you may be able to file as head of household instead. If your children are minors, and you have primary custody of them, you may qualify to file as head of household. You also have to be unmarried the past year to claim this status.
This filing statue will increase the amount of money you can make before you move up to a higher tax bracket. It allows you to keep more money in your pocket by paying out less in taxes.
Claim The Child Tax Credit
Filing as head of household may also make you eligible for the child tax credit. This credit lets you decrease the amount of federal income taxes you owe if you have primary custody of your children.
For each child you have who is under 17 years of age, you can reduce your federal income taxes by $1,000. If you make under $75,000 as head of household, you can claim this credit.
If your child credit exceeds the taxes that you owe, you may get a refund. For example, if you owe $400, your child tax credit will eliminate that $400 and qualify you for a $600 tax refund.
Claim The Dependent Care Credit
In addition to the above credit, you may also be able to also claim the dependent care credit as a single parent. This lets you deduct money that you paid to have your child looked after.
If you sent your child to daycare or paid a nanny to watch your children, those expenses can be written off on your taxes. You can write off up to 35% of childcare expenses up to $3,000 dollars.
When you get ready to do your taxes this year, be sure to talk to an accountant at HBE Becker Meyer Love LLP and see if you can file as head of household and if you can claim both credits discussed above. If you can, you will be able to reduce the taxes that you owe this year and may even be able to increase your refund that you receive this year; extra money is always nice.