Friday Four: Tax Expert Offers Advice To Moms. Here’s Where The Money Reside!

True happiness involves the full use of one’s power and talents. After almost two decades of doing taxes under the table, I’ve been de-liv-ered! I just certified with the IRS as a Tax Expert and have landed a contract with Intuit! It’s one of the top tax preparation service providers in the the nation! With that being said, I’m here for you! I want to file your taxes and get you the biggest refund possible. Now if you’re wondering if I know anything, well here’s just a snippet of how I look out for moms.

If you noticed the cupcake in the slide show, just know that India love me! It has beets, and turtles in there! And it was delicious!

Filing Tips For Single Moms:

  1. File as Head Of Household. It the best bang for your return. It gives you a lower tax rate.
  2. File your dependents. Don’t let anyone trick you into using their number for a fraction of the credit. (But that’s not my business.}
  3. Claim Everything! Specifically the Dependent care and Dependent Exception.
  4. Make sure you claim the Child Tax Credit!

Did you hear about President Biden’s proposed COVID-19 stimulus relief package?

Bonus

A. Deduct Child Care Expenses! .Some parents in my local learning pod are capturing big money by filing child care expenses to recoup the money they pay me for hosting their students through out the week.

B. Hire your 8 year old! Mamas, they can sweep your office floor. Just hire and pay them. You don’t have to give them the money, Use it for their college fund or buy a new mini van to cart them around town. (That’s what I did.)

C. Child Support……… maybe taxable. (( So pour more into your 401k))

Child support is not taxable income. And if a parent paid child support, those payments are not considered deductible.

Alimony, on the other hand, counts as income. The spouse accepting alimony must report all the payments as income when completing tax filing. He can, however, increase his employer tax withholding to avoid a surprise tax bill at the end of the year. The ex-spouse paying the alimony may claim a tax deduction.

D. The American Opportunity Tax Credit and the Lifetime Learning Credit help defray the cost of post-secondary education, Kornblatt said. Qualifying single parents who are paying for college or other post-secondary education for their children might be able to claim these credits. The American Opportunity Tax Credit offers a maximum annual credit of $2,500 per student; the Lifetime Learning Credit offers a refund of up to $2,000 per tax return.

In addition to other rules specific to each credit, three basic criteria must be met in order to qualify for these education credits:

  1. The parent, the dependent or a third party must pay qualified education expenses for higher education.
  2. An eligible student must be enrolled at an eligible educational institution.
  3. The eligible student must be a dependent listed on the filer’s tax return.

A couple of options are available as tax breaks for parents saving for their children’s futures. “A single parent planning to pay for college in the future can start saving now using an education savings account or 529 plan — both provide tax-related advantages,” Kornblatt said.

Qualified tuition plans — also known as 529 plans — vary from state to state, but the main tax advantage is the same: The earnings are exempt from federal tax when used for qualified education expenses of the designated beneficiary. And generally, this exemption applies to state tax as well. Tuition, fees, books, room and board all fall under the category of qualified expenses. But contributions to a 529 plan are not tax-deductible.

The Coverdell education savings account can be used to pay qualified expenses for elementary, secondary and higher education. Contributions to a Coverdell savings account are not considered deductible, but amounts deposited in the account grow tax-free.

E. Determine Your Eligibility for the Earned Income Tax Credit

Some single custodial parents qualify for the earned income tax credit. Those with earned income below certain levels who file as single or as head of household can earn credits ranging from $3,400 for one qualifying child to $6,318 for three or more qualifying children.

F. Deduct Adoption Expenses

A parent who adopts a child can claim an adoption credit for the fees, legal costs and travel expenses associated with a legal adoption. In addition, adoptive parents don’t have to pay tax on income they get from adoption assistance provided by their employers.

When taking on taxes as a single parent, the complex IRS rules can be confusing, but you deserve to maximize your savings and possibly get some money back. Take advantage of these tips to help you, but seek the advice of a tax professional if you need it. I’m here sis’!

So yeah, I’ll be working off two different pc’s my desk looks funny to my babies. lol

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