The 3 Best Tax Tips for Single Americans

Being single can be challenging from a financial standpoint. When you’re a part of a couple, you have someone else to potentially split expenses with, like rent and utilities. When you’re on your own, you pay those bills on your own.

But as a single person, there are plenty of opportunities for you to eke out savings on your taxes. Here are some tips to incorporate into your planning and strategy.

1. Reduce your tax liability by contributing to an IRA or 401(k)

The more money you put into a traditional IRA or 401(k) plan, up to the annual allowable limit, the more of your income you can shield from taxes. This year, IRAs max out at $7,000 for tax filers under age 50 and $8,000 for those 50 and older. With a 401(k), you can put in up to $23,000 if you’re under 50 and up to $30,500 if you’re 50 or older.

Read more: we researched free tax software and put together a list of the best options here

The amount of tax savings you reap will hinge on your tax bracket. But if you’re in the 22% tax bracket and contribute $10,000 to a 401(k) this year, it means you’ll save yourself $2,200 by not having to pay taxes on that much income.

2. Know your tax credits

Being single does not automatically mean you won’t be entitled to different tax credits. First of all, you may be single but a parent nonetheless. And in that case, you may be entitled to a number of tax credits related to your children, such as the Child Tax Credit and the Child and Dependent Care Credit, which allows you to claim a portion of your child care costs. 

You may also be eligible for the Earned Income Tax Credit, a credit that’s fully refundable and available to lower-income filers. You may be more likely to qualify for the credit if you have kids, but that’s not a requirement.

What’s more, let’s say you’re going back to school in some capacity to further your career — an option that may be easier to pursue when you’re not tied down. You may be eligible for the Lifetime Learning Credit or the American Opportunity Tax Credit. Tax software generally asks questions as you proceed, to see if you’re eligible for credits like these. 

3. Run the numbers to see if itemizing deductions makes sense

For the 2024 tax year, the standard deduction for single tax filers is $14,600, up an additional $750 from 2023. It can be especially advantageous to itemize deductions on your tax return as a single filer than as a married couple filing jointly, due to the lower standard deduction threshold. 

Let’s say you own a home and pay $12,000 in mortgage interest this year. Let’s say your state and local tax deduction (which includes property taxes) also comes to $10,000. That’s $22,000 in itemized deductions you can take right there, versus a standard deduction of $14,600.

If you were married, your numbers would look different, because in 2024, the standard deduction for married folks filing jointly is $29,200. But if you have expenses to itemize as a single filer, it could result in a lot of savings. 

While being single can be a challenge financially speaking, the upside is getting to live by your own rules and prioritize your own goals without having to worry about a partner’s. And if you do your best to maximize your tax savings, you may be able to overcome some of the financial barriers single people tend to face.

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