Taking care of a family is hard work and expensive. Making ends meet always seems to be the challenge, doesn’t it? There are several areas of tax credits available for single parents that can help you increase your income tax return and decrease some of your financial stress.
- File as the head of your household – because you are. It should decrease your total tax amount and increase your deductions.
- Earned Income Tax Credit
As a single parent, it is likely your income is on the low side. If you qualify, you can get a tax break applying for the Earned Income Tax Credit (EITC). - Child and Dependent Care Credit
Did you job hunt in 2020? If the answer is yes and you paid for childcare while looking, you will probably qualify for the Child and Dependent Care Credit. - Child Tax Credit – This is different than the one above. You can get up to a $2,000 credit if you qualify. See if you do.
This is not an exhaustive list. It takes some time to do the research. Instead of being annoyed, think of it as a job and your will get paid. For example, if you qualify for the child tax credit and it takes you an hour to research it, you just made $2,000 for that hour. I bet you would take any job that paid that much!
If you have more questions about filing your taxes or need help, contact an accountant. The IRS provides a free service, the Volunteer Income Tax Assistance (VITA) program. You qualify if you make less than $57,000. Here’s the link.
There are also businesses that help you file for free. Hope for Single Moms does not endorse a particular business. However, we know that with Turbo Tax is a program that helps you file yourself or offers assistance using it. HR Block also offers a free filing service.
Look for more money saving articles coming soon.