Single parenthood has its struggles, but the Internal Revenue Service rewards you for them a little at tax time. At least one tax break – head of household status – specifically helps parents who are raising children on their own. You may be eligible for others that apply to married parents as well.
The most common tax break all parents receive is the dependent exemption -- $3,900 for each child as of 2013. What's especially nice is that you can also shave $3,900 off your income for yourself because you also pay your own living expenses. To claim this deduction for your child, he must be under age 19, or 24 if he's a full-time student. If he's a teenager or college student, he can earn income, but he can't provide half or more of his own support. As of 2013, you lose the full advantage of this tax perk if you earn too much money, however. If your adjusted gross income is $250,000 or more, you must subtract 2 percent for every $2,500 you earn over the limit from every dependent deduction you claim.
Head of Household Status
One of the rules for qualifying for head of household filing status is that you must have a dependent. Single parents usually qualify – but not automatically. You must also pay more than half your home's expenses for the year, so if you live with a roommate or with your parents, and if they contribute more financially to the household than you do, you'll lose this tax break. If you qualify, you can deduct an additional $2,850 as a standard deduction. The standard deduction for heads of household is $8,950 as of 2013, but only $6,100 for single taxpayers.
Some parents elect to itemize deductions rather than take the standard deduction. You can add up all your qualified expenses for the year and use this number instead if it amounts to more than your standard deduction. Your child can help you out in this respect as well if you pay insurance premiums and unreimbursed medical expenses on his behalf. You can also include your own premiums and expenses. There's a catch, however. As of 2013, you can only deduct the expenses that exceed 10 percent of your adjusted gross income.
Tax deductions come off your income – when you claim them, you pay taxes on less earnings. Tax credits are more advantageous because they come directly off the taxes you owe the IRS. Quite a few tax credits help single parents. If you're head of household and earn less than $75,000, you can claim the child tax credit. Some calculations are involved, but this credit can allow you to deduct up to $1,000 for each of your children if they're younger than 17. If you pay for child care so you can work, you might be eligible for the child care tax credit. Some single parents are eligible for the earned income tax credit as well. The EIC increases with the more children you have, provided your income is below certain limits.
Tax deductions for single parents depend on your child living with you more than half the year. If your child spends equal time or more time with his other parent, you could lose these tax breaks. The IRS typically calculates "time" as overnights spent in your home. It doesn't matter if you work nights and you're not actually there every single evening, and December 31 counts as part of the tax year it occurs in even though the calendar flips over at midnight. If your child splits his time evenly between your home and that of his other parent, tax deductions depend on which of you has the highest adjusted gross income. If you and your ex broke up during the tax year, your overnights are those that occurred after your split – your child must have been with you for more than half of them.
- Nolo: Tax Deductions Every Parent Should Know About
- H&R Block: Tax Tips for Single Parents
- Roberg Tax Solutions: Tax Tips for Single Moms (or Dads)
- IRS: Medical and Dental Expenses
- Maloney & Novotny: Tougher New Rule for Medical Expense Deductions Starts This Year
- IRS: Publication 504
- IRS: A "Qualifying Child"
- Forbes: IRS Announces 2013 Tax Rates, Standard Deduction Amounts and More
Beverly Bird has been writing professionally for over 30 years. She is also a paralegal, specializing in areas of personal finance, bankruptcy and estate law. She writes as the tax expert for The Balance.