What Is Head of Household? Tips for Filing Taxes

Should You File as Head of Household? A Brief Guide

Filing taxes is not easy. It is not something you truly learn about in school. True, there are hundreds of different systems and accountants out there that can help you. However, you should still know where to start. One of the most important details to consider is under what designation you should file.

This filing status can significantly impact the amount of money you spend and receive on your tax return. The status affects your deduction, tax rate, and more. You always want to make sure you choose the best one for your situation.

One of the most common designations is head of household. However, many people do not know what that means. What is it? Who can claim it? These are valid questions when it comes to determining your status, and this article can help you.

What Is Head of Household?

The head of household IRS definition is a single or unmarried taxpayer who maintains a home for a qualifying person.

Filing as head of household means you receive a higher deduction and a lower tax rate. This is in contrast to filing as single. This designation also requires a higher income before it becomes necessary to file taxes with the IRS.

Taking care of a home means you provide more than half the income to maintain the household. These costs can include items such as maintenance, repairs, replacements, and more. There are tools online and information available online with full details about the qualifications of this filing status. One is the IRS Publication 501. However, the general idea involves a married, or considered unmarried, individual who provides more than 50% of income to care for a home.

There are special cases where those who are married legally can still qualify as unmarried. This is if they have separated from their spouse for a specific amount of time. So the answer to the question “Can I file as head of household if I’m married?” depends on the specifics of your situation.

What Is the Difference Between Single and Head of Household on Taxes?

As noted above, if you can qualify, filing as the head can mean a lower tax rate and a higher deduction. This means more money for you in the end. However, particular criteria must be met in order to qualify.

Filing as single means a lower deduction and higher tax rate. It requires much less specificity. This is one of the more common designations, as it can cover a wide breadth of people. If you are single (in the literal sense), you are most likely providing solely for yourself. You may also be receiving significant financial assistance from an outside source. This is why you might file as single as opposed to another designation.

Who Can File Head of Household?

There are specific requirements you must meet to use this filing status. To secure the lower tax rate and higher deduction, you must meet the following criteria:

You must be unmarried – either single or divorced. You might also be legally separated. Or you must be “considered unmarried” (covered later) by the final day of the tax year.

You personally covered more than half of the costs of maintaining the home throughout the year.

A “qualifying person” lived in said home with you for the majority of the year. This is not including temporary absences such as vacations.

If you meet these qualifications, then you are eligible to file as the household head. If you are uncertain about claiming head of household, you can use this handy reference. It even includes a calculator to help you quickly determine your eligibility.

Breaking down these individual conditions, here is a little bit more information about how to know if you qualify for this tax break.

Can You File Head of Household If You Are Married?

Condition number one states that you must not be married or “considered unmarried” in order to be eligible for this designation. This means that legally speaking, there are instances in which even a legally married person can qualify. However, the conditions are very specific and rare.

If your question is simply “Can I file head of household if married filing separate?” the answer is no. In order to qualify for this bracket while legally married is to meet ALL of the following conditions.

  • File your taxes separately from your spouse
  • Pay the majority of the household expenses – more than half, to be exact
  • You cannot have lived with your spouse for the last six months of the tax year you are filing for
  • Provide the main home for a qualifying dependent
  • Claim an exemption on said dependent

Only by meeting all six of those conditions can a married person file under this specific status. If you do not meet these requirements, you should consider filing married but separate. You might also consider discussing with an accountant what designation best fits your situation.

Can Two People Claim Head of Household?

The short answer is no.

This is mainly due to condition number two. You must have covered over half of the household expenses for the year to qualify as the “head”. Maintaining a home includes all bills, like electricity, internet, water, and more. It also entails rent or mortgage payments. Other costs are insurance, groceries, property taxes, repairs, and more. If two people are claiming they paid more than half of the household expenses, then that is simply bad math.

Note that you can still qualify for the designation even when receiving money from parents or other sources. This is so long as you are personally providing more than half of the money towards the home. Receiving financial assistance does not automatically disqualify you from this particular status.

Can I Claim Head of Household without Dependents?

Technically, yes.

But there’s more to it than just this simple answer.

You must have a “qualifying person” in order to file under this tax status. A qualifying person does not necessarily have to be a dependent that you claim for exemptions. This is especially true with the new tax rules of 2018On the other hand, not claiming your qualifying person as a dependent can be a tricky situation. There are only some instances where you can use a qualifying person without claiming them as a dependent.

A “qualifying person” is anyone related to you to whom you provided more than half of their living expenses. This can be anyone from children, stepchildren, parents, or another relative. They must be related to you directly. A boyfriend or girlfriend for whom you provided cannot count as a qualifying person.

In most cases, you must be able to claim your person as a dependent in order to utilize them for filing status. The only exceptions are when you are unable to claim a child because the other parent has already claimed them. However, they still must meet the other criteria in that they have lived with you the majority of the year and you provided most of their income. Children are really the only cases in which you can potentially use them as your qualifying person without claiming them as dependents. Most other circumstances require dependent status.

Other Important Questions

Am I Head of Household If I Rent?

The answer is yes.

Nowhere in the IRS does it say you must specifically be a homeowner in order to qualify for a tax status. As long as you provide more than half of the finances for the entire home, even if it is a rented apartment, then you can still qualify. Assuming, of course, you meet the other requirements as well.

If I File Head of Household, What Does My Spouse File?

It depends. Are you “considered unmarried” or unmarried?

As previously noted, you must be “considered unmarried” or unmarried in order to qualify for this particular tax filing status. As such, you must be separated or living apart from your spouse if you are still legally married in order to file this way.

How your spouse files depends on their own qualifications. The only thing they cannot do is file as single, as neither of you would be considered legally single, even if you do claim head.

What Are the Benefits?

This tax filing status means a higher deduction and a lower tax rate.

On your returns, you will receive more money than you would with other filing statuses. As of 2018, the standard deduction for this status is $18,000. This is $3,000 higher than the other standard deductions for filing single. Furthermore, under the new tax plan, people in the same income bracket will still see significant differences in taxes between head and single filers.

Final Reminders

If you qualify, filing with this designation can save you quite a bit of money in the long run. To determine if you qualify can be a tedious task, but it will be well worth it if you do. Hopefully, this guide provides a better understanding of exactly what it means, how it can benefit you, and how to know if you qualify or not.

Ultimately, discussing your options with a tax accountant is always your best bet. They will have the skills and understanding to get you the best refund possible, as well as understand exactly how to help you file. Filing under this designation is not the only option, though it is certainly the most appealing.

Qualifying for is no easy task. But if you are unmarried, provide more than half the finances for your home, and have a qualifying person(s) that you can claim as a dependent, save yourself some money by filing as head of household on your next set of taxes.