It offers several tax benefits, including a higher standard deduction and lower tax rates compared to the single or married filing separately statuses. Here's how you can qualify and benefit from this status.
Benefits of Head of Household Filing Status
Higher Standard Deduction: The HoH status provides a larger standard deduction than the single or married filing separate status, which can significantly reduce taxable income.
Lower Tax Rates: Generally, the tax brackets for HoH are more favorable than those for single filers or married couples filing separately.
Qualifying Child or Relative: You must have a qualifying child or relative living with you (or in some cases not living with you) to claim this status.
Requirements to Qualify as Head of Household
To qualify as HoH, you must meet specific criteria set by the IRS:
Unmarried Status:
You must be unmarried on the last day of the tax year.
If legally separated under a divorce decree by December 31st, you are considered unmarried.
If you are still married but have lived apart from your spouse for the last six months due to reasons like job assignments or military deployment, you may be considered unmarried if other conditions are met.
Maintaining a Home:
You must have paid more than half of the household expenses during the year.
Eligible expenses include rent/mortgage interest (not principal), utilities, insurance on your home, property taxes, repairs, and groceries.
Qualifying Person:
A qualifying person typically includes children under age 19 (or under 24 if full-time students), and certain relatives like parents if they live with you most of the year and meet dependency tests.
For parents who don’t live with you but whom you support financially by paying more than half their living costs in an elderly care facility or similar setting.
Special Considerations
If your spouse was a nonresident alien at any time during the year and did not choose to treat them as resident aliens for tax purposes, they cannot be considered as part of this filing status unless another qualifying person exists in your household.
Community property rules may apply differently in states that recognize community property when determining income and expenses if part-year marriages occur within those jurisdictions.
By understanding these requirements and benefits, eligible individuals can take advantage of significant savings through reduced taxes while maintaining financial stability. For detailed guidance tailored to specific situations beyond these general guidelines, refer directly to IRS Publication 17 and consult resources available through IRS Interactive Tax Assistant.