If there are two things in life that are relentlessly complicated, it’s parenthood and filing a tax return.
While being a single parent will always present a unique set of challenges, filing your taxes as a single mom doesn’t need to be as hard as it seems.
Here are five tips for simplifying your taxes as a single parent.
1. File as Head of Household
Being the head of household typically provides you with a lower tax rate than you’d get filing separately. It should also allow for a higher standard deduction. Both of these together should dramatically lower the chances of needing to apply for tax loans.
How do you know if you qualify as the head of household according to the IRS? These are the requirements:
- You’re unmarried on the last day of the tax year you’re filing in.
- Your kids live with you at least 6 months of the year.
- You contribute to at least 50 percent of the finances in the home.
2. Claim Dependents
If you’re a single mom, you might be able to claim your child as a dependent. Doing so will provide you with extra benefits like the dependent exemption and a tax credit.
However, not all single moms can claim children as dependents. You can claim your child as a depending if you meet the following criteria:
- You and the father of the child are legally divorced or are separated
- You and the child’s father have lived apart for the past six months
- The child receives at least 50 percent of their support from you at least half of the year
- You or your child’s father has legal custody
- You have written a waiver or have a pre-1984 legal agreement allowing the non-custodial father to claim your child as a dependent
3. Go for Child-Related Tax Credits
If you filed in the 2016 tax year, you could have earned a Child Tax Credit of up to $1,000 per child claimed. You could also have earned the Child and Dependent Care Credit of up to $3,000.
4. Don’t Forget the Earned Income Tax Credit
The Earned Income Tax Credit (EITC) is available for working single mothers and families whose income is below a certain threshold.
If you’re single and filing as a head of household, you can claim the ETIC if you make less than $39,617 and have one child, $45,007 and have two children, and $48,340 if you have three or more children.
The maximum credits for this year are:
- $6,318 if you can claim three children
- $5,616 for two children
- $3,400 for one child
5. Post-Secondary Education Tax Benefits
If you’re a single mom of kids who are out of school but still dependent, you can avail of two tax credits: the American Opportunity Credit (AOTC) and the Lifetime Learning Credit.
The American Opportunity credit provides up to $2,500 of the cost of post-secondary education for the first four years of that education. The second credit provides a $2,000 tax credit per student for an unlimited number of years.
Saving Money and Time on Your Taxes
Being a single mother is tough. Fortunately, the IRS has provided a few ways to benefit from tax credits based on your status and income.
With these five tax tips, you’ll be able to spend less on taxes and more on something nice just for you. You deserve it!