Fiscal cliff could impact single moms
January 2, 2013
Going to school and working a job are hard enough on their own, and financial aid for moms doesn't always cover childcare and living expenses, so for students in this position, every dollar counts. Balancing these aspects of life could get more difficult in the future, though, so single moms need to be mindful of their finances now that federal legislation may be affecting their income.
Despite the U.S. government passing emergency rules to protect tax cuts and financial affairs of businesses and private people, there are still a number of things that will impact overall take home pay. For single moms with college scholarships, this could mean more time is needed at work, and banking on that now can help change household budgets before a monetary crisis hits.
Politico wrote that taxes are expected to rise for most Americans this year. On top of that, personal tax refunds won't be as big as they were in the past, with credits like Earned Income and Child Tax Credits being reduced or revoked in some cases. For single moms with college scholarships, these might have been funds they counted on for relief every year that they will now have to figure out how to go without.
A bright side for academics
On the plus side, Education Week wrote that the federal government did vote to save college credits for everyone. That means that single moms can still count these expenses on their annual returns, recovering some of the extra expense they have to put into school materials, transport costs and other miscellaneous but mandatory financial outlays associated with getting back into college. The American Opportunity Tax Credit could save single moms with college scholarships up to $10,000 per year off the top of their tax liabilities, making it a critical addition to many returns in light of other economic hardships they're likely to face from the changes.
Looking at take-home pay and figuring out what to do with new totals will be key for single parents to balance personal budgets moving forward. Just like every other aspect of their lives, moms on their own must be well aware of their situation in order to adequately plan ahead for eventualities like higher taxes, increased prices at the pump and the grocery store and other financial matters.
