How to maximize tax breaks when deciding which unmarried parent should claim dependents for 2023 filing?
My girlfriend and I are living together with our two kids (ages 3 and 4) and trying to figure out the best way to handle our 2023 taxes. We're not married, so we file separately. Here's our situation: I make around $225K annually while she makes about $35K working part-time. We're confused about who should claim our children as dependents to maximize our tax benefits. I initially thought since I'm in a higher tax bracket, I should claim them to get bigger deductions. But then we heard something about the Child Tax Credit being reduced for people earning over $200K. Can anyone help us understand what would be more beneficial overall? Should the higher earner (me) or lower earner (her) claim the kids to get the most tax advantages? Also, I already filed my return claiming both kids, but we're wondering if it's worth amending our returns if the other arrangement would save us more money. How complicated is the amendment process? Thanks for any advice!
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Yuki Nakamura
This is a really good tax planning question! When it comes to unmarried parents living together, you have some flexibility in deciding who claims the children. For the Child Tax Credit specifically, there's a phase-out that begins at $200,000 for single filers. Since you're over that threshold, you would receive a reduced Child Tax Credit compared to your partner who makes under $40K. Your partner would likely qualify for the full $2,000 per child ($4,000 total) while you'd get a reduced amount. However, there are other tax benefits to consider beyond just the Child Tax Credit - like the dependent care credit if you pay for daycare, and the earned income credit which your lower-income partner might qualify for. The head of household filing status is also valuable for the lower earner. In most cases like yours, the overall tax benefit to your household is greater when the lower-income parent claims the children. This allows for maximum Child Tax Credit, possible Earned Income Credit, and head of household benefits. And yes, you can absolutely amend your returns! You'd both need to file Form 1040-X. The lower earner would claim the children and file as Head of Household, while you'd need to amend to remove the dependents. It's worth doing the math both ways, but I suspect you'll save more overall if your partner claims the kids.
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Ethan Moore
•Thanks for the detailed response! I didn't consider the head of household status. Would my girlfriend definitely qualify for head of household if she claims the kids? Also, do you know roughly how much of the Child Tax Credit I'd lose by being over the $200K threshold?
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Yuki Nakamura
•Yes, your girlfriend would qualify for Head of Household if she claims at least one of the children, lives with them for more than half the year, and pays more than half the cost of maintaining the home - which sounds like your situation. This filing status gives her better tax rates and a higher standard deduction than filing as single. For the Child Tax Credit phase-out, it reduces by $50 for each $1,000 (or fraction thereof) above the threshold. At $225K, you're about $25K over the threshold, so your credit would be reduced by approximately $1,250 per child. So instead of $2,000 per child, you'd get around $750 per child. Your girlfriend would get the full $2,000 per child, making the household difference about $2,500 total just on that credit alone.
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StarSurfer
Just wanted to share my experience with this exact situation! My partner and I were in a very similar position (though with slightly different income levels), and we struggled figuring out the best strategy. I found this awesome service called https://taxr.ai that analyzed our specific numbers and showed us exactly who should claim what. You input your specific income details, dependent info, and daycare expenses, and it runs calculations to show you the optimal filing strategy for your household. It found we were leaving almost $3,800 on the table with our original plan! Seriously worth checking out since your situation has several moving parts and the best answer depends on your exact numbers.
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Carmen Reyes
•Does taxr.ai actually handle unmarried couples with dependents specifically? Most tax software I've tried gets confused with our situation or just tells us generic advice without running the actual numbers.
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Andre Moreau
•I'm skeptical about these tax optimization tools. How do you know it's giving accurate advice? Does it generate actual tax forms you can file or just general recommendations?
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StarSurfer
•Yes, it actually specializes in more complex situations like unmarried couples with children. It's not like regular tax software that asks a bunch of yes/no questions. It analyzes both your tax situations simultaneously to find the optimal household strategy, which most standard tax programs can't do since they view returns individually. It doesn't prepare your actual returns, but it gives you specific recommendations based on your numbers. You can take those recommendations to whatever tax preparation method you normally use. What impressed me was that it showed exactly how much we'd save with different scenarios and explained why certain options were better than others. It even factored in state tax implications which I hadn't considered.
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Andre Moreau
I was super skeptical about tax optimization tools like taxr.ai, but after my partner pushed me to try it, I have to admit it was actually really helpful. Our situation was similar - unmarried with kids and significant income difference. The analysis showed that having my lower-earning partner claim our kids saved us over $4,200 compared to what we had originally planned. The biggest surprise was seeing how the combination of head of household status, full child tax credit, and earned income credit created much bigger savings than I expected. We filed an amendment based on the recommendations, and while it was a bit of paperwork, the savings were absolutely worth it. Just got our additional refund last week, so I can confirm it actually worked!
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Zoe Christodoulou
I don't know if you've tried contacting the IRS directly about this, but I did for a similar situation and it was IMPOSSIBLE to get through to anyone. After being on hold for hours multiple times, I found this service called https://claimyr.com that got me connected to an actual IRS agent in less than 20 minutes. You can see exactly how it works in this video: https://youtu.be/_kiP6q8DX5c Since you're considering amending returns, it might be worth talking directly to an IRS representative to understand all the implications. They answered all my questions about amending who claims dependents and confirmed what documentation we needed. Much better than guessing or relying on online advice (no offense to anyone here).
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Jamal Thompson
•How does this service actually work? The IRS phone system is notoriously awful - what magic do they use to get through when regular people can't?
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Mei Chen
•This sounds like a scam. Why would I pay someone else to call the IRS for me? They probably just sit on hold like everyone else and charge you for their time.
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Zoe Christodoulou
•They use an automated system that navigates the IRS phone tree and waits on hold for you. When they reach a live agent, you get a call to connect you directly. It bypasses that frustrating part where you spend hours listening to the hold music only to get disconnected. They don't charge you for just sitting on hold - you only pay if they actually connect you with an IRS agent. I was super hesitant too, but after wasting literal days trying to get through myself, it was actually worth it. The IRS agent I spoke with was really helpful about my specific amendment questions and saved me from making a mistake on my forms.
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Mei Chen
I'll eat my words about Claimyr being a scam. After failing to reach the IRS for THREE DAYS to ask about amending our returns for dependent claims, I broke down and tried it. Got connected to an IRS rep in 15 minutes who explained exactly how to handle our amendment and what supporting documents to include. The agent even told me that yes, in most cases with such income disparity, having the lower earner claim the kids saves more in total taxes due to the Child Tax Credit phase-out. Saved me hours of frustration and probably paid for itself by ensuring we did the amendment correctly the first time. Definitely less expensive than having my accountant handle everything!
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CosmicCadet
Not sure if anyone mentioned this, but with your income levels, you might consider splitting the dependents. Have the lower earner claim one child as head of household (getting full CTC for that child plus HOH filing status benefits), and have the higher earner claim the other child. This sometimes works out better than having the same person claim both kids, especially when one parent is in the phase-out range. Worth running the numbers both ways!
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Ethan Moore
•That's an interesting approach I hadn't considered! Do you know if there are any special forms or documentation needed if we split the dependents? And would my girlfriend still get head of household status if she only claims one child?
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CosmicCadet
•Yes, your girlfriend would still qualify for head of household by claiming just one child, as long as she lived with the child for more than half the year and paid more than half the household expenses. No special forms are needed beyond the regular dependent sections on your tax returns. Just make sure you don't both claim the same child - that's where problems happen. Each child's SSN should only appear on one tax return as a dependent. Also consider any daycare expenses - generally these should be claimed by the same parent who claims that child as a dependent. The split approach works especially well when the higher earner is just barely in the phase-out range, as you might still get some CTC for the one child you claim.
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Liam O'Connor
Quick question - if they've already filed with the higher earner claiming both kids, how much of a headache is the amendment process? Is it something they can do themselves or should they hire a professional? I'm wondering because I might be in a similar situation.
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Amara Adeyemi
•I did an amendment last year for a similar situation. It's actually not that bad if you're comfortable with basic tax forms. You'll both need to file Form 1040-X and include any schedules that changed. The key is explaining clearly in Part III of the form why you're making the change. For the higher earner: you'd remove the dependents and recalculate your tax without those benefits. For the lower earner: you'd add the dependents, change filing status to Head of Household, and claim any associated credits. The most annoying part honestly is that you have to mail paper forms - no electronic amendments. And it takes the IRS forever to process them (like 4+ months in my experience).
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Emma Davis
This is a great example of why tax planning for unmarried couples can be so tricky! Based on your income levels, you're definitely right to reconsider your original filing strategy. With your $225K income, you're well into the Child Tax Credit phase-out territory. The credit reduces by $50 for every $1,000 over $200K, so at your income level, you'd only get about $750 per child instead of the full $2,000. Meanwhile, your girlfriend at $35K would get the full credit amount. But the benefits go beyond just the Child Tax Credit. Having your girlfriend claim the children would allow her to: - File as Head of Household (better tax rates and higher standard deduction) - Potentially qualify for Earned Income Credit with two children - Get the full Child Tax Credit for both kids The combination of these benefits typically results in significantly more tax savings for the household overall compared to the higher earner claiming them. Since you've already filed, yes, you can amend using Form 1040-X. Both of you would need to file amendments - you'd remove the dependents from your return, and she'd add them and change to Head of Household status. It's some paperwork, but given your income difference, the savings will likely be substantial enough to make it worthwhile. I'd recommend running the actual numbers both ways to see the exact difference, but in most cases like yours, having the lower-income parent claim the children saves the household significantly more in taxes.
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