Credits and Deductions for Single Parents

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In our society we have had an unfortunate shift in the family dynamic...In 1947 the average family was 2 parents and 2 children. Now that statistic has shifted dramatically, and more families are getting by with half as many parents.

With this becoming so common those parents have it much harder not only having to be one parent, but both. If you are struggling in this situation yourself, rest assured there are people who respect you and look up to you. Those people include myself, and I have included several tax credits and deductions that could help make the difference and increase the value of your refund. Every little bit helps, and we at Online Tax Pros hope it helps you out this tax season!

Education Tax Credits: These two credits can't be claimed by any one person, but they are good for if you have a custody agreement to give one to each parent. The first is the Lifetime Learning Credit. This credit gives you a maximum of $2,000 for tuition fees and up to $4,000 for students in disaster areas of the Midwest. You can claim this credit every year your child is enrolled in undergraduate and graduate college programs.

Next, the Hope Credit only applies to the first two years of college or technical education courses. This credit is valued at $1,800 per student for parents or college-enrolled dependents, and the value increases to $3,600 if you're in the Midwestern disaster areas as with the Lifetime Learning Credit.

Adoption Credit: You may be able to take a tax credit for qualifying expenses paid to adopt an eligible child. If you claim the adoption credit, you must file a paper tax return with required adoption-related documents.

Child Tax Credit: This $1,000 tax credit is available for each child in the cases of most single parents. However, if the household income is more than $75,000 and the filing status is single, qualifying widow(er) or head of household, the credit decreases in value. Only the parents with primary custody get to take advantage of this credit, but if there is a shared-custody agreement, it's up to the parents' discretion how they can either alternate or let one parent have it each year.

Child Care Credit: It's hard to watch your kids all the time. The Internal Revenue Service knows this, and has put forth a credit that allows you some help and not make every day “take your child to work day.” You have to include the name and tax identification number for the child care provider at the time of filing. This credit allows you to claim $3,000 on one child, and up to $6,000 for two or more children. This is completed on IRS form 2441 and attached to your 1040 tax return.

Earned Income Tax Credit: This credit was created to help families in lower income brackets. You're almost guaranteed a refund if your taxes owed are less than the Earned Income Tax Credit.
According to irs.gov, the values for 2012 are as follows:
Earned Income and adjusted gross income (AGI) must each be less than:
    $45,060 ($50,270 married filing jointly) with three or more qualifying children
    $41,952 ($47,162 married filing jointly) with two qualifying children
    $36,920 ($42,130 married filing jointly) with one qualifying child
    $13,980 ($19,190 married filing jointly) with no qualifying children
Tax Year 2012 maximum credit:
    $5,891 with three or more qualifying children
    $5,236 with two qualifying children
    $3,169 with one qualifying child
    $475 with no qualifying children
Investment income must be $3,200 or less for the year.

Claiming College Students as Dependents: When your kids go off to college, you can still continue claiming your child as a dependent as long as they are enrolled full-time. Keep in mind though that if your children are working as well as going to a University, they can't claim an exemption on themselves if you have already claimed them with this deduction.

Hopefully these credits and deductions will give you a big refund. In these hectic times you can always e-file with Online Tax Pros and get your taxes taken care of from home. This will allow you to get your refund directly deposited in your bank account for your disposal. You definitely deserve it for all the hard work you do to take care of your children.

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