California residents may be interested in some information about life after divorce. For newly-single parents, there can be some unexpected changes with regard to taxes.
After a parent goes through the divorce process, they may be facing many issues in their new life as a single parent. One often-overlooked aspect of single parenthood, however, is how it affects a person’s tax situation. Some of these changes may be beneficial to a taxpayer, so they should not be overlooked.
For instance, if the parent has physical custody of the child for at least half of the year and earns at least 50 percent of the household’s income, they may qualify for “head of household” status on their taxes. This can give them a more beneficial tax rate and other deductions that can save on the amount of tax owed to the government. Dependents for single parents making up to $279,650 in the year will give the parent a deduction of nearly $4,000 per child.
Those single parents with lower incomes may qualify for a number of deductions that can save a lot of money. For those earning under $46,997 who have three or more children living with them, the Earned Income Credit can shave off over $6,000 in tax liability. Single parents also gain a $1,000 tax credit for children 16 and under, as long as they are earning less than $75,000 for the taxable year.
The tax deductions and other issues for a single parent after divorce can be complex and confusing without the assistance of an attorney. The attorney may be able to guide a parent through the divorce process and what to expect after a divorce. Legal help may also be useful in making any post-divorce modifications to a settlement agreement.