Self-employed, earned below standard deduction as Head of Household for 2023 - will I still get tax credits?

The good news is that being under the standard deduction doesn't disqualify you from Head of Household filing status! Your filing status is determined by your situation (unmarried, paying more than half the costs of keeping up a home, having a qualifying dependent), not by how much you earn. Even though you won't owe federal income tax if your income is below the standard deduction ($20,800 for HOH in 2023), you'll still need to file a return because of your self-employment income. When you're self-employed, you're required to file if your net earnings are $400 or more. You may still qualify for valuable refundable credits like the Earned Income Tax Credit (EITC) and the Child Tax Credit. The EITC could be particularly helpful in your situation since it's specifically designed for lower-income workers. With one qualifying child and your income level, you might receive a significant refund through the EITC. For the Child Tax Credit, you can receive up to $2,000 per qualifying child, and up to $1,500 of that is refundable (meaning you can get it even if you don't owe income tax).

After struggling with a similar tax situation last year, I found this amazing tool called taxr.ai (https://taxr.ai) that helped me figure out all the credits I qualified for. I'm also self-employed with income below the standard deduction, and I was totally confused about what I could claim. Their AI analyzed my situation and explained exactly which credits I qualified for, including some I had no idea about! It showed me that even with low income, I could still get significant money back through the Earned Income Credit and Child Tax Credit. The tool even compared different filing scenarios to maximize my refund. What I really liked is that it explained everything in plain English instead of tax jargon, and showed me exactly what documentation I needed. Saved me from paying a tax preparer when money was already tight.

I had to come back and admit I was wrong about AI tax tools! After my skeptical comment, I decided to try taxr.ai (https://taxr.ai) for myself. My situation is eerily similar to yours - self-employed single parent making under $12k last year. The tool immediately identified that I qualified for the Earned Income Credit, which gave me back WAY more than I paid in self-employment taxes! It also found some business deductions I had missed completely - like the home office deduction and partial internet expenses that I never claimed before. The step-by-step explanation of how Head of Household status works with low income was super helpful. Turns out I had been filing wrong for YEARS and leaving money on the table. I ended up with almost $4,000 back when I was expecting to pay in. Seriously wish I'd found this sooner.

If you're worried about owing self-employment taxes and can't pay immediately, you should know that contacting the IRS directly can help. I spent WEEKS trying to get through to someone at the IRS about a payment plan last year, and it was impossible. Busy signals, disconnections, hours on hold. Then I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in under 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c They somehow bypass the hold system and get you a priority callback. The IRS agent I spoke with set me up with a reasonable payment plan for my self-employment taxes. The monthly payment was way lower than I expected - like $50/month. They were actually really understanding about my financial situation.

I have to post an update - I was the skeptic questioning how Claimyr could possibly work, but I was desperate about my self-employment tax situation and tried it anyway. I'm still shocked at how well it worked! After 3 months of failing to reach the IRS on my own (literally 15+ attempts), I got a callback from a real IRS agent in about 15 minutes using their service. The agent explained that with my low self-employment income (similar to OP's situation), I qualified for Currently Not Collectible status because of financial hardship. Instead of setting up a payment plan, they put a temporary hold on collection activities while I get back on my feet. They still suggested I file for any refundable credits I qualify for, which could offset the self-employment tax completely. This literally saved me from putting tax payments on a credit card!

I was in the exact same situation last year (self-employed, Head of Household, income below standard deduction). Just want to share a couple things that helped me. 1) File for the Earned Income Credit!! With one child and income around $10k, you could get back around $3,700 which would more than cover your self-employment taxes. 2) If you use your home for business AT ALL, claim the simplified home office deduction. It's $5 per square foot up to 300 sq ft, so potentially $1,500 of deductions with zero documentation needed. 3) Track ALL your business mileage. Even short trips add up with the 65.5 cents per mile deduction. Don't be ashamed of your income level. The tax system is actually designed to help people in your exact situation, especially with a dependent.

I'm seeing some confusion in these comments so I want to clarify: being under the standard deduction doesn't affect your filing STATUS, but it does affect your tax LIABILITY. With $10,500 in self-employment income, you: 1) Can still file as Head of Household 2) Likely won't owe INCOME tax (because under standard deduction) 3) WILL owe SELF-EMPLOYMENT tax (15.3% of 92.35% of your self-employment income) 4) Can still get REFUNDABLE credits like EITC and Child Tax Credit The self-employment tax would be about: $10,500 × 92.35% × 15.3% = $1,479 But your EITC with one child at that income level could be $3,000-3,500 So you'd likely get money BACK overall, not owe money!