Tax benefits for single parents – tarlow cpas

If you are a single parent dealing with the complicated tasks of working and raising a family, there are some tax benefits and issues you should be aware of.

Filing Status – Just because you are single or widowed does not mean you have to file your tax returns using the single filing status. Housing benefit questions Tax law provides two far more beneficial filing statuses that you might qualify for. How much rent does housing benefit pay These statuses provide higher standard deductions and more beneficial tax rates:

Head of Household – If you are unmarried and pay more than half the cost of maintaining a household that is the principal place of abode for your qualified child or children for more than one-half of the year, then you qualify for the head of household status. How much housing benefit should i get Qualified children generally include your children, grandchildren, foster children or stepchildren under the age of 19 or a full-time student under the age of 24 who is not self-supporting. How do you qualify for housing benefit This is true even if you allow the other parent to deduct the dependency exemption for the child.


Qualified Widow – If you are widowed, you may qualify for the head of household status discussed just above. How much rent will housing benefit pay However, if your spouse passed away in one of the two prior years, you have a child or stepchild (not including a foster child or grandchild) whom you can claim as a dependent and who lived with you the whole year, and you paid more than half the cost of keeping up the home, you can use the higher standard deduction for married individuals filing jointly. Housing benefit self employed In comparison, in 2016, the standard deduction for marrieds filing jointly is $12,600, which is twice the amount for a single individual.

Child Support – Any child support you receive from the non-custodial parent is tax-free to you. Are students entitled to housing benefit Child support is also not included in household income for the purposes of determining the premium tax credit if you are otherwise qualified and obtain your health insurance through a government marketplace.

Alimony – In most cases alimony payments received from your former spouse must be included in your income and are subject to tax. Cancel housing benefit online However, you can treat the alimony as earned income for purposes of making an IRA contribution of as much as $5,500 ($6,500 for those age 50 and over).

Exemptions – You are entitled to an exemption allowance of $4,050 for yourself and each of your children and others whom you claim as dependents on your tax return. Housing benefit number leicester Generally, the custodial parent will be the one eligible to claim a child’s exemption allowance. How housing benefit is paid The value of the exemptions you claim is subtracted from your gross income when you are figuring out the amount of your taxable income. Housing benefit calculator scotland For example, if you are in the 25% tax bracket, each exemption allowance you deduct saves you $1,013 of tax. Can students claim housing benefit However, if you allow the non-custodial parent to claim the exemption of a qualified child, then you forego the $4,050 exemption allowance for that child.