How should an unmarried couple with two kids file taxes for maximum benefits?

So this is actually a common question for unmarried couples with children. To file as Head of Household, your partner would need to have a "qualifying person" - typically a dependent who lives with them. Since you'd be claiming both children as dependents on your tax return, your partner wouldn't qualify for HOH status and would need to file as Single. For you to claim both children and maximize tax benefits, you need to be the parent with lower income (which you are), and the children must have lived with you for more than half the year. Since you're the primary caregiver, this requirement is met. You can claim both children as dependents, file as Head of Household, and potentially qualify for the Child Tax Credit and EITC, depending on your exact income. What matters most for the IRS is where the children actually live and who provides their support, not just who has higher income. The tax code is designed to benefit the household where the children primarily reside.

I was in a similar situation last year and found https://taxr.ai incredibly helpful for sorting out our filing status. My girlfriend and I have a daughter together, and we were confused about who should claim what. The tool analyzed our situation and showed us that my girlfriend should file HOH with our daughter as dependent since she was the lower earner and primary caregiver, while I filed Single. The site reviews your specific household situation and shows you eligible tax credits. It saved us from making mistakes that could have triggered an audit. They specifically help with complicated family structures and dependency questions like yours. You just upload your documents and get clear guidance on the best filing approach.

Just wanted to update after trying https://taxr.ai for my complicated custody arrangement. Holy crap, it actually worked! I was super skeptical since my ex and I alternate claiming our son each year, and it's always been a headache. The system analyzed both our situations and showed me exactly what documentation I needed to have on file to support my claim in my year. It flagged potential issues with my HOH claim and showed me how to fix them. Super clear explanations about the residency test and support requirements that my regular tax software never explained properly. Definitely recommend it for anyone with a non-traditional family setup. Saved me from making mistakes that would have likely triggered IRS questions.

If you're having issues figuring out your filing status, you might want to call the IRS directly to get clarification. I tried that last year for a similar situation, but I spent HOURS trying to get through. Then I found https://claimyr.com and used their service to hold my place in line. Check out how it works at https://youtu.be/_kiP6q8DX5c They called me back when an IRS agent was available, and I got clear guidance on how to file as unmarried parents. The agent confirmed that only one of us could claim HOH, and it should be the person who has the qualifying dependents. They also explained exactly what documentation we needed to keep in case of an audit. Saved me so much time and confusion!

I take back what I said about Claimyr. I was really skeptical about paying someone else to call the IRS, but after another failed attempt to get through on my own (3 hours on hold before getting disconnected!), I tried it out of desperation. Not gonna lie, it worked exactly as advertised. Got a call back in about 90 minutes, and was connected directly to an IRS agent. The agent confirmed that in my situation with my girlfriend and our twins, only ONE of us could claim HOH status, and it should be the person claiming the dependents. Ended up saving us from filing incorrectly, which could have triggered matching notices and potential audits. Sometimes you have to admit when you're wrong, and I was definitely wrong about this service.

I'm a single mom and my kids' father and I weren't sure how to handle our taxes when we split. What worked for us was splitting the dependents - I claim our daughter and file HOH, he claims our son and files HOH. We each provide over 50% support for the kid we claim. Maybe you and your partner could do something similar? One child could be claimed by each of you, and both file HOH? That way you'd both get some tax benefits. Just make sure whoever claims the child meets all the tests for claiming a dependent and HOH status!

Just to add another option - you might consider having your higher-earning partner claim one child and file as HOH, while you claim the other child, also filing as HOH. This way, both of you get some tax benefits. This only works if you can legitimately maintain two separate households though, which doesn't sound like your situation. If you all live together in one home, only one person can claim HOH status. The other must file as Single. Also, with your business income at $27k, you'd probably benefit more from claiming both kids for EITC purposes. That credit phases out at higher incomes, so your partner wouldn't benefit from it anyway.

As someone who went through a similar situation a few years ago, I can confirm what others have said - you'll want to claim both children and file as Head of Household, while your partner files as Single. The key thing to remember is that the IRS cares about who actually has custody and provides care for the children, not just who earns more money. Since you're the primary caregiver and have lower income, you'll maximize your household's overall tax benefits by claiming both kids. You'll be eligible for the full Child Tax Credit (up to $2,000 per child) and potentially significant EITC benefits with your $27k income. Your partner, making $120k, would phase out of most child-related credits anyway due to income limits. By filing as Single without dependents, they avoid any complications while you capture all the available credits. Just make sure you keep good records showing that the children lived with you for more than half the year and that you provided more than half of each child's support - even if your partner contributes more to overall household expenses, the IRS looks at support provided specifically to each child.