Gah! Taxes! No one likes them (except maybe accountants and sadists), but you and I know we have to deal with them.
As a single mom or dad, there are specific considerations you must take when filing your taxes — things your married parents don’t have to deal with, and stuff that your friends without children have no idea about.
Here is the down-and-dirty about what single parents must know about your 2017 tax filing.
There are some new rules, and income requirements that differ from last year. But the bottom line remains: File early, take all the deductions you are legitimately entitled to, and ask expert advice from a reputable tax preparer like Turbo Tax when you get stuck.
Determine who you can claim as a dependent
The more kids you can count as a dependent, the higher the deductions. Your number of dependents determines whether you can take any number of other credits and deductions.
This is usually stipulated in a separation or divorce agreement, and the parent who would normally claim the child can agree to sign a waiver allowing a non-custodial parent to make the claim. You cannot split this deduction for a single child, but some parents agree to take turns claiming children on alternate years. Or, if there are two or more children, you and your ex might agree that each parent can claim one of the kids. However, the IRS determines that a child is a dependent based on if the child lived with a parent for at least six months and was financially supported for the same time by that same parent.
In my family, this is something that had to be re-negotiated after our initial divorce agreement, since our incomes changed. One I earned the money, I took the kids as deductions on my taxes.
You can claim as dependents:
- Yourself, if you cannot be claimed as someone else’s dependent
- Your children, if they're under 19 years old, or under 24 years old if they're full-time students, as long as they don't provide more than half of their own financial support
- Foster children
- Grandchildren whom you support financially
For every dependent kid, you can deduct $4,050 for tax year 2017 (the same as 2016). I have two of these little tax deductions. Yay! This benefit phases out for heads of household earning $287,650 or more, and is phased out completely if you earn more than $410,150.
Head of household status
If you were unmarried on Dec. 31, 2017, earn at least 50 percent of your household income and your kids live with you for 6 months of the year or more total, file as head of household. This usually affords you a lower tax rate, and higher deductions. For example, this year, head-of-household’s standard deduction is $9,350 (up from $9,300 in 2016), compared with just $6,350 (up from $6,300 in 2016) for single filers. Whoo-hoo!
Single parents earning $75,000 adjusted gross income or less can take $1,000 off their tax bill for each dependent kid who was aged 16 and younger on Dec. 31. For 2017, the standard deduction for a taxpayer who can be claimed as a dependent by another taxpayer cannot exceed the greater of $1,050 or $350 + the dependent's earned income.
Heads of household who have an income or are full-time students can claim up to $3,400 (up from $3,000 for 2016) for one kid or $5,616 (down from $6,000 for 2016) for two or more children for qualifying child care. This applies only if you can claim the child as a dependent, and the care was provided so you can work or study (sorry, no babysitters for date nights, ladies!). This includes summer day camps and after-school programs. Phaseout starts at $75,000 for single head of household filers.
This was a huge benefit to me as a newly single mom of two tiny kids who required a lot of expensive New York City child care. I now appreciate it as the single mom of older kids who take expensive theater and drum lessons, and go to soccer every week.
Dependent care spending accounts
If this tax-sheltering benefit is available through your employer or business, single heads of household can contribute up to $5,000 tax-free to pay for child care expenses for dependent children. For some small business owners (like me), it can make sense to set up a spending account to shelter this income.
Earned Income Tax Credit
If you have three or more kids and earned less than $48,340 as a single parent, take this credit, people! If you have one or two children you may also qualify if your income is lower. The maximum credit is $6,318.
If you adopted a child and the process was finalized in 2017, you are eligible for up to $13,570 (up from $13,460) per child in federal tax credits. This is one case where the federal government is a beautiful organization supporting families. Muah, IRS!
Estimate how much you owe, with this Turbo Tax calculator.
Don’t forget oft-overlooked tax deductions! The federal government estimates that the average filer misses more than $6,000 in deductions! Don’t be one of them! These can include:
- Medical expenses exceeding 10 percent of your gross adjusted income, or (pr 7.5 percent if you're older than 65)
- Mortgage interest, property taxes, and mortgage insurance
- Points you paid to obtain a mortgage
- Charitable contributions (just one more reason to give)
- Job search expenses, like resume consulting, networking events, gas and other expenses to attend conferences and job interviews. If you are an ambitious single parent working towards your career goals, I hope this deduction was a big one.
Preparing your taxes, and finding all the hidden deductions, doesn’t have to be stressful or expensive. Turbo Tax products, automatically helps single parent tax filers maximize deductions, including those for single moms and dads. Lord knows we need all the deductions we can get! Turbo Tax products feature great user-friendly features!
What tax deductions were you missing in the past? What tips do you have for easy filing? Share in the comments!
Emma Johnson is a veteran money journalist, noted blogger, bestselling author and an host of the award-winning podcast, Like a Mother with Emma Johnson. A former Associated Press Financial Wire reporter and MSN Money columnist, Emma has written for the New York Times, Wall Street Journal, Forbes, Glamour, Oprah.com, U.S. News, Parenting, USA Today and others. Her #1 bestseller, The Kickass Single Mom (Penguin), was named to the New York Post's ‘Must Read” list.
Emma regularly comments on issues of modern families, gender equality, divorce, sex and motherhood for outlets like CNN, Headline News, New York Times, Wall Street Journal, Fox & Friends, CNBC, NPR, TIME, MONEY, O, The Oprah Magazine and The Doctors. She was named Parents magazine’s “Best of the Web,” “Top 15 Personal Finance Podcasts” by U.S. News, and a “Most Eligible New Yorker” by New York Observer.
A popular speaker, Emma presented at the United Nations Summit for Gender Equality. Read more about Emma here.