Introduction
Head of Household is one of five tax filing statuses used by the Internal Revenue Service (IRS). It is available to taxpayers who are unmarried or “considered unmarried” on the last day of the tax year and provide a home for a qualifying person. Understanding the Head of Household filing status can help you save money on your taxes. This comprehensive guide covers eligibility requirements, filing information, and potential benefits that come with being classified as Head of Household.
Exploring the Definition of Head of Household for Tax Purposes
The Head of Household filing status is designed for individuals who are not legally married, but still provide a home for a qualifying person. To be considered a “qualifying person”, the individual must have lived with the taxpayer for at least half of the tax year, be related to the taxpayer, and be either a dependent or a qualifying relative. In some cases, an unrelated individual may qualify if they meet certain tests.
Who Qualifies as a Head of Household?
In order to qualify as a Head of Household, the taxpayer must meet several criteria. The taxpayer must:
- Be unmarried or “considered unmarried” on the last day of the tax year;
- Have paid more than half of the cost of keeping up a home for the year;
- Have a qualifying person living in the home with them for more than half of the year;
- Not be a dependent of another taxpayer.
What Are the Requirements to Qualify?
To qualify for Head of Household status, the taxpayer must meet all of the criteria listed above. Additionally, the taxpayer must have provided a home for the qualifying person for more than half of the year and must have paid more than half of the costs associated with keeping up the home. These costs include things such as rent, mortgage payments, real estate taxes, utilities, food, clothing, medical care, and other necessities.
How to Qualify as a Head of Household on Your Tax Return
Once you have determined that you meet the criteria to qualify as a Head of Household, you will need to document your eligibility. You should gather documentation such as rent receipts, mortgage statements, utility bills, and any other records that prove you paid more than half of the cost of keeping up a home. You should also make sure to have proof that the qualifying person lived in the home with you for more than half of the year.
Filing as Head of Household
Once you have gathered all of the necessary documentation, you can file your tax return as Head of Household. When filing your taxes, you will be asked to enter your filing status and provide the information required to support your claim. Once you have entered the required information, you will be able to see the tax benefits associated with being classified as Head of Household.
What Benefits Come with Being Classified as Head of Household?
One of the biggest benefits of being classified as Head of Household is the lower tax rates. As a Head of Household, you are eligible for a lower tax rate than you would be if you were filing as single. This can result in significant tax savings when filing your return.
In addition to the lower tax rate, you are also eligible for a larger standard deduction. For 2019, the standard deduction for Head of Household filers is $18,350, compared to $12,200 for single filers. This can result in even greater tax savings.
Finally, there are other tax benefits available to Head of Household filers. For example, you may be eligible for additional credits such as the Earned Income Credit or the Child and Dependent Care Credit. These credits can further reduce your tax liability.
Common Myths About Head of Household Status
There are several common myths about Head of Household status. Here are three of the most common myths:
- Myth 1: You must be divorced or legally separated to qualify as Head of Household.
Fact: You do not need to be divorced or legally separated in order to qualify as Head of Household. If you are unmarried or “considered unmarried” on the last day of the tax year, you may qualify. - Myth 2: You must have a child to qualify as Head of Household.
Fact: While a child can be a qualifying person, you do not need to have a child to qualify as Head of Household. A qualifying person can be a dependent or a qualifying relative. - Myth 3: You must live alone to qualify as Head of Household.
Fact: You do not need to live alone to qualify as Head of Household. You just need to have a qualifying person living in the home with you for more than half of the year.
A Comprehensive Guide to Determining Head of Household Status
If you think you may qualify as a Head of Household, here is a step-by-step guide to determine your eligibility:
Step 1: Determine Your Eligibility
The first step is to determine whether you meet the criteria to qualify as a Head of Household. To do this, you will need to consider whether you are unmarried or “considered unmarried” on the last day of the tax year, and whether you have provided a home for a qualifying person for more than half of the year and paid more than half of the costs associated with keeping up the home.
Step 2: Gather Documentation
Once you have determined that you meet the criteria, you will need to gather documentation to prove your eligibility. This includes documents such as rent receipts, mortgage statements, utility bills, and any other records that prove you paid more than half of the cost of keeping up a home. You should also make sure to have proof that the qualifying person lived in the home with you for more than half of the year.
Step 3: File Your Tax Return as Head of Household
Once you have gathered all of the necessary documentation, you can file your tax return as Head of Household. When filing your taxes, you will be asked to enter your filing status and provide the information required to support your claim. Once you have entered the required information, you will be able to see the tax benefits associated with being classified as Head of Household.
Conclusion
Being classified as Head of Household on your tax return can provide significant benefits. It can result in lower tax rates, larger standard deductions, and additional credits that can further reduce your tax liability. If you think you may qualify as Head of Household, it is important to understand the requirements and gather the necessary documentation to prove your eligibility.
For more information about Head of Household status, you can visit the IRS website or consult a tax professional for assistance.
