Shockingly, I just finished up my taxes with a little bit of help from the H and R block website, and discovered that I owe no taxes and will be getting back all the money that I put in. I say put in, but really it was taken from me because of exemptions.
How did I manage to lower my tax burden? A few ways.
For one, I was able to claim Head of Household. This is the first time ever that I have claimed Household, because I have always let my kids fathers claim them. But this year I claimed one of the three children, and was able to receive the now reduced $2k credit.
Secondly, I contributed to the company's 401k plan. I also contributed to a Roth IRA. Between the two of them I was allowed to take the Savers Credit, which is for low income filers and couples who contributed to retirement savings. I would not have qualified for it if I had made another $5k in income or was not Head of Household. Tough criteria to meet. Interestingly, I had to stop using the H and R Block software halfway through my tax return because it wanted me to upgrade in order to help me with my Savers Credit, which I discovered was entirely stupid. It told me I would only get a $200 credit also, as it wasn't factoring in the Roth IRA. Thank goodness I went and printed out the form and discovered my credit was much much higher, about 10% of the amounts that I had contributed to both accounts.
I chose the standard deduction. It's $19k for my income bracket, which since my property taxes were low wasn't that much of a big deal.
I cat wait to get my tax return back. I am going to use the money to fuel this year's Roth IRA contribution.