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Tax tips for unmarried or divorced parents

Unmarried and divorced parents in New Jersey might not realize that there are some tax credits of which they could take advantage. For example, they may want to consider filing as head of household and for certain types of credits on their 2014 tax return.

Single parents can file taxes as head of household if they were unmarried as of Dec. 31, 2014, had their children living with them for at least six months during the year and earned at least 50 percent of their households' incomes during 2014. Filing as head of household often provides lower tax rates and larger deductions.

An important tip for filing 2014 taxes is determining who can be claimed as dependents. Divorce settlements often stipulate which parents will claim their children as dependents on their tax returns. If they have two kids, for example, the parents may decide to each claim one child as a dependent on their taxes. The exemption for dependents in 2014 is $3,950 for each if the head of household earned less than $279,650.

One type of tax credit that single parents can apply for is the Earned Income Tax Credit. This gives unmarried or divorced parents a maximum credit of $6,143 if they had at least three children living with them and earned less than $46,997 in 2014. Single parents with fewer than three kids could also be eligible if they earned less. Another credit gives $1,000 off the taxes owed for each dependent child under the age of 17 as of Dec. 31, 2014, if the parent earned $75,000 or less in adjusted gross income.

The filing of taxes could be a major concern for parents going through divorces that involve child support and alimony. Some parents might consult with financial advisors and private attorneys before making any decisions regarding tax issues prior to the finalization of their divorces. Even after their divorces, the parents could get financial and legal counsel when filling out their tax returns.

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