Single moms will benefit greatly from being informed when it comes to income tax and their rights. A lack of clear advice can lead to confusion, and it’s always better to get help than to spend time worrying. For single mothers who know how the system works there are many opportunities to get refunds on the tax they’ve paid over the course of a financial year. Life can be difficult for single moms when it comes to making ends meet, so getting the tax benefits they’re entitled to can be very important indeed.
Clarify Your Status
It’s important for single moms to know where they stand. They should file tax returns as the head of a household even if they’re still married. As well as this it’s very wise on many levels to get all the financial aid for single mothers that’s available in terms of money towards rent and government help for those on low incomes. Tax return forms will ask for details about financial aid single moms receive, and the authorities will take it all into consideration when calculating the amount of money that should be refunded. If you’re on a low income then clarifying your status will result in larger deductions and a lower standard rate of taxation.
Think About Further Education
There are tax breaks available for those undertaking a course of further study, and that activity can be compatible with being a single mom if the emphasis is on home study. Further education can benefit single moms in many ways and there are incentives to study in the form of grants and bursaries. There’s tax relief available on the first $40,000 of study costs for any given year.
Claim for Childcare
Child and dependant care tax credit is available for moms who pay for someone to take care of their child while they’re at work or college. This tax credit can reduce the amount you pay by up to 35%. To qualify for this you must have paid for the childcare with your own money and evidence of that may be required.
Take Advantage of Tax Credits
Child tax credits can reduce what you pay by up to $1000 per child, so it’s well worth claiming all that you’re entitled to. If you don’t pay enough tax to benefit from the full refund, no credits can be claimed back in cash. The earned income credit can also reduce what you have to pay as a single mom.
Think About Starting a Small Business
Starting a small business from home can be easy and provides many benefits when it comes to tax. Household bills can be written off as expenses and that can amount to huge savings.
Where tax is concerned it pays to get good advice. There are professionals on hand to answer any questions you might have and it’s always wise to get things straight in your head sooner rather than later.