What Is the Average Tax Return for a Single Mother?

A tax return is the outcome of your annual tax filing, which can be a refund or a tax liability. There is no single “average” tax return amount for a single mother, as each individual’s financial situation, including income, number of dependents, and eligible tax benefits, is unique. This article provides general guidance on elements influencing a single mother’s tax outcome, not specific tax advice.

Key Factors Influencing a Single Mother’s Tax Outcome

Filing status significantly impacts a single mother’s taxes. Many single mothers qualify for the Head of Household filing status, which offers tax advantages over the Single filing status. To qualify, you must be unmarried, pay over half the cost of keeping up a home, and have a qualifying person living with you for over half the year. This status provides a larger standard deduction and more favorable tax brackets, potentially reducing overall tax liability. For the 2023 tax year, the standard deduction for Head of Household filers is $20,800.

Claiming dependents substantially impacts tax benefits. A qualifying child must meet criteria for relationship, age, residency, and support. The child must be your son, daughter, stepchild, foster child, sibling, or a descendant of any of these. The child must be under age 19, or under 24 if a full-time student, and live with you for over half the year, while not providing over half of their own support.

The amount and type of income received throughout the year directly influence taxable income and, consequently, your tax liability or refund. Income from wages, self-employment, interest, or unemployment benefits contributes to your total income. While higher income leads to a higher tax obligation, some tax credits for families may phase out at higher income levels, affecting the final tax outcome.

Navigating Applicable Tax Credits

Tax credits directly reduce tax owed, dollar for dollar, benefiting single mothers. Some credits, known as refundable credits, can even result in a refund if the credit amount exceeds the tax liability.

The Earned Income Tax Credit (EITC) is a refundable credit for low to moderate-income working individuals and families. The amount of EITC varies based on your income and the number of qualifying children you claim. For the 2023 tax year, the maximum EITC ranges from $3,995 for one child to $7,430 for three or more children, with specific income thresholds applying.

The Child Tax Credit (CTC) provides up to $2,000 per qualifying child. A portion of this credit, known as the Additional Child Tax Credit (ACTC), is refundable, meaning you might receive it as a refund even if you owe no tax. For 2023, the refundable portion of the CTC is capped at $1,600 per child, requiring earned income above $2,500 to qualify.

The Child and Dependent Care Credit (CDCC) helps cover care expenses for a qualifying child or dependent, allowing you to work or look for work. For 2023, you can claim up to $3,000 in expenses for one qualifying person or $6,000 for two or more. The credit itself is a percentage of these expenses, ranging from 20% to 35%, depending on your adjusted gross income, with higher incomes resulting in a lower percentage.

Understanding Relevant Deductions

Deductions reduce your taxable income, which in turn lowers your tax liability. When filing, choose between the standard deduction or itemizing. Most single mothers filing as Head of Household find the standard deduction more advantageous due to its higher amount compared to the Single filing status.

While many taxpayers use the standard deduction, specific deductions might apply and reduce taxable income. For instance, the student loan interest deduction allows you to deduct up to $2,500 of interest paid on qualified student loans. This deduction is available even if you do not itemize.

Educators may deduct up to $300 of unreimbursed expenses for classroom supplies and professional development for the 2023 tax year. Contributions to a traditional Individual Retirement Arrangement (IRA) can also be deductible, with a maximum contribution of $6,500 for those under 50 in 2023, or $7,500 if age 50 or older.

Essential Information and Documentation for Filing

Filing your tax return involves gathering personal and financial documents. You will need Social Security Numbers (SSNs) and dates of birth for yourself and all family members you plan to claim. Accurate personal information ensures proper identification and processing of your return.

For income verification, collect wage and earning statements like Form W-2 and various 1099 forms. These might include Form 1099-NEC for self-employment income, Form 1099-INT for interest earned, Form 1099-DIV for dividends, Form 1099-G for unemployment benefits, or Form 1099-R for retirement distributions. Other income records, such as from gig economy work, should be on hand.

To support any deductions or credits, specific documentation is required. For child care expenses, you will need records from your care provider, including their Employer Identification Number (EIN) or Social Security Number (SSN), which can be requested on Form W-10. Educational expenses typically involve Form 1098-T, while student loan interest paid is reported on Form 1098-E.

If you have health insurance, you might receive Form 1095-A, B, or C. Records for mortgage interest (Form 1098), property taxes, and receipts for charitable contributions are also essential if you plan to itemize. A copy of your previous year’s tax return is helpful, as it contains information like your Adjusted Gross Income (AGI).

Steps for Filing Your Tax Return

Once your essential information and documents are organized, file your tax return. Several options are available, catering to different preferences and financial situations. Many taxpayers use free tax software, like IRS Free File, available to individuals or families with an Adjusted Gross Income (AGI) of $79,000 or less in 2023. Commercial tax software is also widely used, providing guided preparation.

For those who prefer assistance, tax professionals can prepare and file your return. Free tax preparation services are offered by programs like Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE), helping eligible individuals, including those with incomes $67,000 or less, persons with disabilities, or limited English speakers. These services are staffed by IRS-certified volunteers.

After preparing your return, you can choose to e-file or mail a paper return. E-filing is recommended for its speed and immediate confirmation of successful submission. If expecting a refund, setting up direct deposit ensures faster receipt of funds, usually within 21 days for e-filed returns. Track your refund status using the IRS “Where’s My Refund” tool. After filing, keep copies of your submitted tax return and supporting documents for at least three years, for future reference or in response to an IRS notice.