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The (Single) Parent Guide to E-filing Your Taxes

Returns due April 18th; where are your deductions?

The Internal Revenue Service announced that it was extending the tax return deadline by three days—April 18th is the 2011 deadline.  This is good news for all those procrastinating parents who are still trying to gather paperwork.

If you are filing your own taxes online with an H&R Block, Turbo Tax or another free e-file website, there are several child-related deductions of which parents should be aware.

For a good part of the last decade, I have e-filed my own taxes and have found great results.  By no means does this make me an expert on the subject, but if this soccer mom can do it; I think pretty much everyone can be walked through the steps of the e-file process.

The e-file program that I used through H&R Block provided a list of all the paperwork I should assemble before I started.  The best thing about this e-file program is that if you need something defined — like who qualifies as a dependent — it will let you know.  Also, this e-file program can point out errors before it will allow you to e-file by itemizing them and then taking you back to the point where you might have made a mistake. It walks you through every step of the process with a series of questions that let you know which deductions you are eligible.

For quite some time now, I have filed as a single parent which entitles me to “head of household status.”  Your filing status is determined by your situation -- married filing jointly, married filing separately or single. 

If you are married and have the time, you can start two different returns and file the one that provides the best return.  Make sure not to file both returns or, you will be audited; even I know that. If you are a couple that decides to file separately only one parent can claim the child(ren) for tax purposes.  The same goes for couples who are separated or divorced; so figure that out before you start your individual returns so that there is no chance that both of you will claim the child(ren).

Parents receiving child support are not taxed on that income and parents paying child support cannot deduct it from their income tax.  Alimony, or spousal support, is taxable because taxes have not been withheld. Alternatively, those paying support ordered through a divorce or separation decree are deductible although the law gets complicated if alimony is terminated within the first three calendar years. Temporary support orders do not apply as taxable income or deductions.

Usually the parent within which the child(ren) reside most of the time takes the deduction but, if you are receiving or paying child support you should ask either your lawyer or an individual at the Domestic Relations Section where your case has been heard about your specific situation.   

In most cases, your children will qualify as dependents because they live with you for at least half of the year, are under the age of 19 or, if attending school full-time for at least 5 months, under the age of 24. While you cannot claim your spouse as a dependent, you can claim step, adoptive or foster children. 

If you are a new mom and your child was born within six months of the close of the year, don’t worry. That infant qualifies as a dependent and the “must live with you for six months” criteria does not apply. This is also true for any children deceased within the tax year. 

Qualified dependents equal deductions and benefits during tax time. 

  • Dependent Exemptions - Each dependent is considered an exemption and, for each dependent your taxable income will be reduced by $3,650.  
  • Child tax credit - Depending on your income, your federal tax will be reduced by $1,000 per qualifying child who is a U.S. citizen and lived in the U.S.A. for at least half the year.
  • Childcare deductions - If you send your child(ren) to a daycare so that you can maintain employment, you can deduct 20 – 35 % of the cost or, up to $3,000 for one child and up to $6,000 for multiple children.  You will need the childcare’s Employer Identification Number or the  childcare provider’s Social Security number, as long as that person isn’t also a dependent.  You can claim up to if you have more than one child
  • Earned Income Credit - If your earned income and adjusted gross income is below $43,352 for a single parent with three or more qualifying childre your maximum credit could be as much as $5,666.
  • Unreimbursed medical expense deductions - Yes, the braces that were not reimbursed by your insurance company can equal a big deduction for you.
  • American Opportunity Credit - Formerly known as the Hope Credit, the AOC provides relief from the cost of higher education and is available to those who pay $4,000 or more in qualified undergraduate tuition and related expenses for tax years 2009 and 2010 of up to $2,500.
  • Life Time Learning Credit - If you claimed the AOC, then you cannot also claim the LTLC, which is a $2,000 credit but has more narrow income qualifications than the AOC.

While cannot put a price on parenting, if the Federal government is willing then you might as well benefit from every tax credit and deduction that you can.

E-filing has been a simple and inexpensive way for me to file each year.  Most single parents don’t have a whole lot of deductions beyond their children but, if your taxes are more complicated because of investments, mortgage interest or other issues, you should make an appointment with a tax preparation specialist or accountant soon because April 18th isn’t that far.

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