The Head of Household filing status is available to individuals who are not married or considered unmarried or provide more than half of the cost of maintaining a home for a qualifying person, such as a child or elderly parent.
This filing status offers a higher standard deduction and lower tax rates than the Single or Married Filing Separately statuses.
To qualify for Head of Household status, the taxpayer must have paid more than half the cost of keeping up a home for the year and have a qualifying dependent who lived with them for more than half of the year.
The Head of Household (HOH) filing status can offer several tax advantages, including:
1. Lower tax rates: HOH taxpayers typically pay lower tax rates than Single or Married Filing Separate taxpayers. This is because more of their taxable income falls into lower tax brackets.
For example, in tax year 2022:
– The 12% tax bracket applies to Single filers with taxable income between $10,275 and $41,775. Taxable income above this is taxed at 22%.
– If you qualify for HOH status, you can have taxable income between $14,650 and $55,900 before moving out of the 12% tax bracket and into the 22% tax bracket.
– If your taxable income is $50,000, filing as HOH instead of Single can save you $910 in federal income taxes.
2. Higher standard deduction: HOH taxpayers receive a higher standard deduction than Single or Married Filing Separate taxpayers. In the tax year 2022, the standard deduction for HOH is $19,400, while Single and Married Filing Separately taxpayers are only entitled to a $12,950 standard deduction.
For example:
– If you are a single parent with one child and your taxable income is $40,000, filing as HOH instead of Single can save you $845 in federal income taxes.
– If you are caring for an elderly parent and your taxable income is $60,000, filing as HOH instead of Single can save you $1,309 in federal income taxes.
It’s important to note that to qualify for HOH status, you must meet certain criteria, such as being unmarried or considered unmarried, paying more than half the cost of maintaining a home for a qualifying person, and having a qualifying dependent who lived with you for more than half the year.
To qualify for the head of household tax filing status, you must meet certain requirements. Specifically, you must:
– Pay for more than half of the household expenses, including rent or mortgage payments, utilities, and groceries.
– Be considered unmarried on the last day of the tax year. This means you are either single, divorced or legally separated.
– Have a qualifying child or dependent. This can include a child you support and care for, a relative who lives with you and whom you support financially, or even a non-relative, such as a friend, who meets certain criteria.
Want to file as Head of Household?
Are you any of the following?
– A single parent who pays for more than half of the household expenses for themselves and their child.
– A divorced or legally separated parent who has custody of their child and pays for more than half of their household expenses.
– An adult child who provides more than half of the financial support for their elderly parent who lives with them.
– A person who supports a relative, such as a disabled sibling or grandparent, and pays for more than half of their household expenses.
If you qualify as any of these individual cases, then you are eligible to file as Head of Household.
We hope this helps clarify who is eligible to file as head of household, and provides some new examples to illustrate the different situations in which this tax filing status may apply.
