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A Father's Day gift for single dads: 5 tax breaks

Dad deserves as much rest as he can get. So on this Father's Day, a good and easy gift is to let your father sleep a little longer.

"There should be a children's song: 'If you're happy and you know it, keep it to yourself and let your dad sleep.'"
-- comedian and father of five Jim Gaffigan

A bit more shut-eye is especially welcome by fathers who are raising families on their own.

There were 2 million single fathers in the United States last year, according to the latest U.S. Census Bureau data. These solo pops, who accounted for 17 percent of the country's population in 2013, are this week's By the Numbers figure.

The number of single dads last year was up slightly from the 1.96 million similarly situated fathers in 2012.

One thing that's remained constant, however, is how all those dads ended up without a partner. Most of them, about 44 percent, were divorced.

Thirty-three percent were never married. Another 19 percent were separated.

And although it's a popular and sympathetic way to portray television pops, from Sheriff Andy Taylor raising Opie to Steven Douglas' three sons to Eddie's father's courtship, only 4.2 percent of solo dads in 2013 were widowed.

Still, regardless of how a dad came to be the only parent, raising a child alone is hard. At least the tax code provides some help.

Here are five tax savers for single fathers.

1. Head of Household filing status: In most cases, a solo dad should file as head of household. This allows him to claim various child-related tax breaks. It also offers a larger standard deduction amount and lower income tax brackets.

A dad who is single because he lost his spouse gets another option. For the year in which his wife or husband passed away, dad can still file a joint tax return. This gives him the same benefits as a married couple.

Then for the next two tax years, the widowed dad should look into filing as a qualifying widower with a dependent child.

2. Dependent claim: When a kiddo meets the tax code's five dependent child tests, a parent can claim the youth as a dependent. This provides an added dollar amount, known as an exemption, that helps cut your gross earnings to a lower taxable income level.

3. Child tax credit: If you have a dependent child younger than 17, this $1,000 tax credit is the easiest and one of the most productive tax breaks out there.

Since it's a credit, you get to subtract the amount directly, dollar-for-dollar from any tax you owe. If Uncle Sam is due $1,200 and you have a child that qualifies for the credit, your tax bill drops to $200.

And if you have more three or more kids, you might be able to net a tax refund by claiming the additional child tax credit.

4. Child care costs: Dads who have a child care flexible spending account at work can save some money. This workplace benefit lets parents put in money before paycheck taxes are figured, helping cut dad's tax bill a bit. You can put in up to $5,000 a year into the account and then use the money to help pay for child care costs.

There's also the child and dependent care tax credit. As noted earlier, a credit provides a direct tax savings on your ultimate Internal Revenue Service bill. Solo dads can claim this child care credit when you pay someone to look after kids who are 12 or younger while dear old dad is at his job.

5. Earned Income Tax Credit: The cost of day care is just one of many, many child-related expenses. Finding the cash is particularly difficult for single parents, who often are short on cash. The Earned Income Tax Credit (EITC) can help.

Created in 1975 as a way for lower-income workers to offset the Social Security taxes that come out of their paychecks, it directly reduces a tax bill. The more kids you have, the more valuable the EITC.

Even better, it's a refundable credit. Yep, that's just like its name sounds; it could get you a refund if your EITC amount is larger than what you owe.

These are just a few ways that Uncle Sam salutes via the tax code dads on their special day and the rest of the year. Here's hoping it's a good one for you and that you can use some of these items to lower your tax bill.

Now take a break from taxes, dads, and enjoy Father's Day!

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Konstantin Titov

Child raising can be difficult. Without a spouse, the concerns are even higher. As a single father, one has full responsibility for all aspects of day-to-day child care. Thank you for the article. I hope single dads will find it very useful to lower their tax bill.

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