Filing taxes as head of household has many benefits. You get a higher standard deduction as well as a lower tax rate but who can file as head of household? Read more on whether or not you qualify to claim the head of household filing status.
First and foremost, what do you get in extra when filing taxes as head of household?
A taxpayer who files taxes as head of household will get a higher standard deduction. The head of household standard deduction is about 1.5 times higher than the single standard deduction. This ensures that you get to reduce taxable income if you’re anticipated to take the standard deduction.
On top of a higher standard deduction, you get a lower tax rate. The marginal tax rates are the same for those who file as head of household but the taxable income amounts for each bracket are lower.
So, while a taxpayer with $50,000 taxable income who’s filing taxes as single is at a 22% tax bracket, this is 12% for head of household. That said, head of household pay less tax than single filer—at least in the lower tax brackets.
Requirements for Claiming Head of Household
The requirements for claiming head of household filing status is simple. A taxpayer who wants to file taxes as head of household must meet the following requirements.
- You must be unmarried.
- You must have at least one qualifying dependent.
- You cover at least half the cost of keeping up a home.
For tax purposes, unmarried means a couple of different things. You can be single, divorced, or legally separated. You can also be married but if lived more than half the tax year away from your spouse, you are considered unmarried for tax purposes. If you fit these criteria, you can file taxes as head of household.
To claim as head of household, you must be living with a dependent for at least half the tax year. The dependent is also must be claimed as dependent on your tax return. Generally, the dependent must be under 17 years of age by the end of the tax year and didn’t provide more than half of her or his financial support.
You must cover at least half the cost of keeping up a home. This includes everything from rent to mortgage to utilities to groceries. As long as you pay more than half the cost of home expenses, you are qualified to file taxes as head of household.