Filing as Head of Household is a tax filing status in the United States that offers certain benefits and potentially lower tax rates compared to other filing statuses, such as Single or Married Filing Separately. To qualify for Head of Household status, you must meet the following criteria:
- Unmarried or Considered Unmarried: You must be unmarried or considered unmarried on the last day of the tax year. This means you're either single or considered separated from your spouse under certain conditions.
- Paid More than Half the Cost of Maintaining a Home: You must have paid more than half the cost of maintaining a household for yourself and a qualifying person. A qualifying person can be your child, stepchild, foster child, sibling, step-sibling, or a descendant of any of them (e.g., grandchild), who meets certain residency and support requirements.
- Qualifying Person Lived with You: The qualifying person must have lived with you for more than half of the tax year, except for temporary absences, such as school, military service, or medical treatment.
The benefits of filing as Head of Household include:
- Lower Tax Rates: The tax brackets for Head of Household status are generally more favorable than the Single or Married Filing Separately rates. This may result in a lower tax liability.
- Higher Standard Deduction: The standard deduction for Head of Household is higher compared to Single or Married Filing Separately, which can further reduce your taxable income.
- Eligibility for Tax Credits: Filing as Head of Household may make you eligible for certain tax credits, such as the Child Tax Credit, Earned Income Tax Credit, and Dependent Care Credit, which can help reduce your tax bill.
It's important to review the IRS guidelines and requirements for Head of Household status to ensure you meet all the criteria and receive the maximum tax benefits available to you.