Business & Finance Taxes

Tax Deductions For Single Parents

In this day and age, we all struggle to maintain our households and put away a little something for a rainy day.
Nowhere is this struggle often more realized than in the home of a single parent.
The federal government recognizes the difficulty of raising children on your own and offers some tax deductions specifically designed to help single parent households.
Most single parents are entitled to a $1000 tax credit per child.
The credit is reduced for households earning upward of $75,000 annually.
Primary parents get the use of this credit.
In the event of equally shared custody, parents can alternate the credit from year to year.
The Child Care Credit is applicable for single parents who must hire someone to care for their children when the parent is working.
The credit can be as high as $3000 for one child, and $6000 for two.
In order to claim the credit, the parent must record the tax ID number of their child-care provider on their income tax return.
The Earned Income Credit is a refundable tax credit that was designed to offset the expense of social security taxes for moderate and low-income families.
You can fill out a questionnaire at the Internal Revenue Service website to determine if your household qualifies for the Earned Income Tax Credit.
Full time college students can generally be listed as dependents on their parents' income tax return.
Be aware, however, that the student cannot claim themselves as an exemption on their own income tax return if they are being claimed as a dependent by a parent.
There are several other tax credits and deductions for which you may qualify as a single parent.
One of the best ways to determine what your legitimate credits and deductions can amount to is to use a tax software program, such as Turbo Tax.
Tax software programs will ask you questions and use prompts to help you find all of the special deductions and credits for which you qualify as a single parent.
If you are attempting to determine whether it is best to file itemized deductions on your return or file a standard deduction instead, let the tax software program calculate your taxes both ways.
The result with the lowest liability or highest refund is the one you will want to use when filing your income tax return.
This procedure greatly simplifies the process of finding your single parent tax deductions and determining how much they will help you lower your tax liability.

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