If you are unmarried and have children, there are some important things for you to know awhile preparing to file your taxes. Tax considerations often blindside single parents who are recently divorced or just had their first child, so briefly reviewed some potential considerations for you during tax season.
Of course, we advocate speaking with a professional for optimal financial health. We are happy to give you recommendations on great tax and financial experts in Scottsdale and Phoenix that we have collaborated with in the past.
Here are some tips from Forbes:
Who claims the child as a dependent?
Only one unmarried parent can claim the child as his or her dependent for federal taxes. Some parents decided this through a legal agreement like a divorce decree while others decide to alternate years. Note: the IRS considers the child to be a dependent of a parent when he or she spends at least six months with that parents and is financially supported by that parent during that period.
Are you the “head of household”?
Under federal tax law, only one of the unmarried parents can file as the head of household, which often involves a lower tax rate and higher deductions. If your kid(s) live with you for most of the year and you earn at least 50 percent of your total household income then you should be filing taxes as the head of household.
Other areas of consideration include:
- Tax credits
- Child care
- Dependent child care spending accounts (some employers offer this)
- Earned income tax credit
- Adoption costs
At DeShon Laraye Pullen PLC, we help clients through a variety of family law matters. If you need help with your divorce or child custody dispute, call us.
Source: Forbes, “8 Things Single Moms And Dads Need To Know About Taxes,” Emma Johnson, Jan. 26, 2015