New Single Mom Filing Taxes - Child Tax Credits on $75k Salary?

You'll definitely have some new tax benefits as a single parent! Here's what you should know: For credits, you'll likely qualify for the Child Tax Credit (up to $2,000 per child) and possibly the Earned Income Tax Credit depending on your actual income after the partial year work. Since you'll be the sole provider, you'll be able to file as Head of Household instead of Single, which gives you a higher standard deduction and better tax brackets. For your medical expenses, you can only deduct expenses that exceed 7.5% of your adjusted gross income, and only if you itemize deductions rather than taking the standard deduction. With a $75k salary (even partial year), it might be hard to exceed the threshold unless you had significant other itemizable deductions. Short-term disability payments are typically taxable if your employer paid for the plan, but not taxable if you paid the premiums with after-tax dollars. You'll need to check how your specific STD plan is set up. With a new baby and these various income sources, this might be a good year to use a tax professional at least once. They can help you establish the right filing pattern as a new parent and might find deductions/credits you'd miss. The Child and Dependent Care Credit could be valuable for the payments to your aunt (if you get her SSN and provide proper documentation).

I went through something similar last year and found taxr.ai super helpful for sorting through all my documents and figuring out what I qualified for as a new single mom. I was getting conflicting advice about whether I could claim head of household in the year my daughter was born, and the site analyzed my situation and confirmed I qualified. The site is https://taxr.ai and they review all your tax documents and identify deductions/credits you might miss. They also explained exactly how to document the childcare payments to my sister so I could claim the dependent care credit properly.

I just want to share that I ended up using taxr.ai after seeing the recommendation here, and it was a game changer for my situation. I was in almost the exact same boat - new single mom with partial year work and childcare expenses. The analysis they did found me an extra $3,200 in refunds compared to what I was going to file myself! They identified that I could use head of household status even though my son was only born in September, and they helped me properly document the childcare expenses I was paying to my mother. Well worth checking out if you're in a complicated new tax situation.

Another thing to consider is getting in touch with the IRS directly if you have specific questions about your situation. I know that sounds awful - I tried calling them for weeks last year about a similar childcare credit question. I finally used this service called Claimyr (https://claimyr.com) that got me through to an actual IRS agent in about 15 minutes instead of waiting on hold for hours. You can see how it works at https://youtu.be/_kiP6q8DX5c if you're curious. I had questions about how to document childcare from a family member that the IRS agent answered perfectly, and it saved me from making a mistake that could have triggered an audit.

I was totally skeptical about Claimyr but was desperate to talk to someone at the IRS about my childcare credits as a new parent. I tried it and got a callback from an actual IRS agent in about 20 minutes! Totally worth it. The agent spent like 15 minutes answering all my questions about documenting payments to family members for childcare and confirmed that yes, I could file as head of household in the first year my child was born. I ended up getting a much bigger refund than I expected because I didn't mess up the childcare credit documentation.

Don't forget to consider adjusting your W-4! Since you'll have a dependent now and will be filing as Head of Household, you could probably adjust your withholding to get more in each paycheck rather than waiting for a refund. The IRS has a tax withholding estimator tool on their website that's pretty helpful. Also, depending on your state, there might be additional state-specific credits for childcare expenses or children. What state are you in?

One thing nobody mentioned - you need to get a Social Security number for your baby ASAP after birth to claim them on your taxes. The hospital will usually give you the paperwork to apply, but if not, you need to go to the Social Security office with the birth certificate. You absolutely cannot claim any child-related credits without their SSN.

Since you're expecting in July and will be working only 8 months this year, there's another important consideration - make sure you understand how your reduced income will affect your tax situation. With around $50k in actual earnings (8 months of $75k), you might qualify for the Earned Income Tax Credit (EITC) which phases out at higher incomes but could be significant with one child and lower income. Also, regarding your student loan interest - you can deduct up to $2,500 per year in student loan interest payments, and with $3,500 in payments annually, this could be a nice deduction. Just make sure you get the 1098-E form from your loan servicer. For your FSA question - you can't double-dip on medical expenses. If your FSA covered something, you can't also claim it as a medical expense deduction. But any out-of-pocket costs beyond what FSA covers could potentially be deductible if you itemize and they exceed 7.5% of your AGI. One more tip - keep detailed records of everything related to childcare payments to your aunt. You'll need her SSN, receipts, and documentation that this is legitimate childcare (not just family help) to claim the Child and Dependent Care Credit. This credit can be up to $1,050 for one child under 13.