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Tax benefits single parents may use

Financial difficulties are common for custodial parents after a they get divorced in Texas. However, federal income tax laws offer some relief from the strain of raising a child alone. There are quite a few ways a single parent can take advantage of them to give them more money for their family.

First, filing status is very important. After a divorce, a parent who earns at least half of the household income and whose child lives with them at least six months out of the year can file as head of household. This status typically lowers the parent's tax rate when compared to single filing status. Depending on the custodial parent's income, each minor child may result in a tax exemption. Parents with high incomes may be eligible for less. Parents with low incomes may also be eligible for the earned income tax credit, which could result in a tax refund above the amount the parent actually paid in income taxes for the year.

Working parents who pay for child care for their young children may also be able to deduct the costs associated with day care, after-school care or summer camp necessary for them to work or go to school. Tax-sheltered dependent care spending accounts can also be used to reduce a single parent's tax burden and help them pay for ongoing childcare expenses.

Many single parents struggle to make ends meet because they don't receive the child support ordered by the court. An attorney who focuses on family law matters may be able to help a client collect the support that is owed for their child. The courts have remedies to assist parents by imposing penalties for nonpaying parents to encourage them to make timely payments.

Source: Forbes Magazine, "8 Things Single Moms And Dads Need To Know About Taxes", Emma Johnson, Jan. 26, 2015

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