Many taxpayers are confused about what filing as a head of household requires. The IRS has some guidelines in place to assist taxpayers with figuring out whether or not they can file with this status. Filing as head of household may offer you the benefits of having a lower taxable income and a larger refund than filing as single. In order to qualify, you must meet the eligibility requirements. The accounting team at Thomas M. DiTullio Accounting can assist you with determining your appropriate filing status.
The criteria for this filing status include the following:
- You must pay for more than 50 percent of your household expenses;
- You must be considered to be unmarried for the tax year; and
- You must have a child or dependent who qualifies.
Because some of the terms that are used are confusing, the IRS has some guidelines to help.
What is the IRS definition of head of household, and what is the difference between single and head of household on taxes?
The IRS defines head of household as a tax-filing status that can be used by unmarried or single taxpayers who keep homes for qualifying persons. This status offers some advantages over filing as a single person. You may enjoy a lower tax rate, a higher standard deduction and a potentially larger refund with this status.
Who can file as head of household?
You are eligible to claim head of household status if the following applies:
- You were not married or you were considered to be unmarried on the last day of the tax year.
- You paid more than 50 percent of your household costs during the year.
- A qualifying person lived with you for more than six months other than temporary absences.
Maintaining a household
You must have paid more than 50 percent of the expenses required to maintain your home during the year. This includes paying more than half of your total household bills. If you receive some financial help for your household expenses from another person, you may still qualify as long as you used your own earnings to pay at least 50 percent of the expenses.
You must also be considered to be unmarried on the last day of the tax year. This means that you have either never been married, are legally separated or divorced, lived away from your spouse for six months or more of the second part of the tax year or you have a nonresident alien spouse and a child who qualifies and who lived with you for more than six months. You will still be considered to be married if the absence from your spouse was because of a temporary reason such as military service, college attendance, medical treatment or business trips.
A qualifying child is one who meets the following criteria:
- Is your biological, step or foster child, or he or she is your half sibling, step sibling, sibling or a descendant
- Lived with you for more than six months
- Is younger than you
- Is younger than 19 by the end of the year or under 24 if he or she is a full-time student in college
- Did not pay more than 50 percent of his or her own living expenses
If you do not have a qualifying child, you can still file as head of household if you have a qualifying dependent:
- Step, foster or biological children or half siblings, step siblings, siblings or descendants who are older than the age requirements but who are permanently and totally disabled
- Your parent
- Your sister-, brother-, mother-, father-, daughter- or son-in-law, or your nephew, niece, uncle, aunt, stepmother or stepfather
You must have paid for more than 50 percent of a qualifying dependent’s expenses during the tax year.
If you need help with your taxes and your filing status, contact the professionals at Thomas M. DiTullio Accounting today.