In reply to:
“not to nitpick, but wouldnt the feds make you pay 15% Social Security on that cleaning business, or is that above a dollar threshold.”
That’s included in the $1,300 tax that the divorced mom owes; in fact, it’s basically all of what she owes. And half of the 15% FICA is deductible from gross income (see line 27 of the 1040). The goal is to come as close to the sweet spot in professed earnings as possible (in the vicinity of $9,000 in adjusted gross income). Below or above that, the single mom with one child gets a less than optimal take. Like I said, for pretending to work and filling out a form, she gets about $1,600 (and credit for paying about $1,350 into the Social Security system - even though she hasn’t paid a dime).