Taxes are always a pain in the neck, especially for single mothers who find themselves squeezed for cash. There are, however, some useful tax breaks that can significantly lower the amount of taxes to pay.1

For example, if you have a dependent child, you’re able to take advantage of a special “head of household” filing status that will allow you to use a larger exemption amount to reduce your tax liabilities.

Given below are some of the more common tax breaks for single mothers for you to keep in mind when you fill your tax returns:

Filing Taxes as a “Head of the Household”

As a single mother and the sole wage-earner in the family, the first thing you must do is to select “Head of the Household” as your filing status.

Generally, you qualify for “Head of Household” status if you have

  • lived apart from your spouse for at least six (6) months,
  • a qualified dependent child and
  • paid more than half of the living expenses of your dependent child for at least six (6) months,

Filing as “Head of Household” has two benefits for single mothers. First, you’ll pay less taxes overall; and second, you’ll also be able to claim a significantly larger tax exemption.

For example, in 2011, taxpayers who use the head of household filing status may receive an $8,500 annual standard deduction. While, a single filer is only entitled to a $5,800 standard deduction.

Earned Income Tax Credit

The Earned Income Tax Credit is a tax benefit that you may be eligible for as a single mother. It is designed primarily to help low- to moderate-income families whose earned income falls below a certain limit.

To qualify for the Earned Income Tax Credit for 2011, you must

  • not claim more than $3,150 in investment income
  • have earned less than

    • $36,052 if you have one qualifying child
    • $40,964 if you have two qualifying children
    • $43,998 if you have three or more qualifying children

For tax year 2011, the maximum EIC you can claim with one qualifying child is $3,094, with two qualifying children is $5,112, and with three or more qualifying children is $5,751.

Child and Dependent Care Credit

Paid a local daycare center to take care of your kid? Do you pay someone to care for your child so that you can work (or look for work)?

If you do, you and your child may qualify for the Child and Dependent Care Credit as long as the child is younger than 13 when the care is provided. This works best when you file as a Head of the Household, and can cut your taxes by up to 35% of what you’ve paid for the service.

For 2011, you may use up to $3,000 of expenses paid in a year for one qualifying individual or $6,000 for two or more.

Child Tax Credit

If your child or children under the age of 17 (on the last day of the year), claimed as dependents and are US citizens, then you can qualify for Child Tax Credit.

This can reduce your taxes by up to $1,000 for each qualifying child. The child tax credit will be gradually reduced based on your income for the year when it reaches a threshold of $75,000 (by $50 for each $1,000 of income above that threshold amount).

Technically speaking, as your income increases, the exemption decreases proportionately. For some, utilizing the child tax credit can reduce their tax liability to zero.2

Additional Child Tax Credit

The Additional Child Tax Credit is a refundable tax credit for people who have a qualifying child and did not receive the full amount of the Child Tax Credit.

As the head of household, you may be able to claim the Additional Child Tax Credit if your earned income is less than $75,000. To claim the additional child tax credit, you must file Form 8812.
No matter what your tax status is, take a little time to make sure that you’re taking advantage of all the breaks available to you – especially if this is the first time you’ll be doing your taxes as a single mother.

If you can afford it, it might even be worth spending a little money to seek advice from a profesional tax consultant to make sure you are not overpaying your taxes.


  1. Source: Tax Information for Parents []
  2. Source: Child Tax Credit – Publication 972 []