Head of Household Tax Information
One of the first things a taxpayer must do once he reaches an age where he's required to file an income tax return is to determine his filing status. The head of household designation is one of five IRS filing statuses available for taxpayers to choose from. The other filing statuses are single, married filing separately, married filing jointly and qualifying widower. There are some significant benefits to the head of household designation so it's essential that you understand whether you qualify.
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Significance
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Each filing status has a corresponding standard deduction amount. And since the standard deduction lowers a taxpayer's tax liability, the higher the deduction, the lower the tax bill. The head of household deduction amount for the 2009 tax year was $8,350. This deduction amount is lower than that of the filing status for single and married filing separately (both $5,700).
Definition
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The head of household status is designed for unmarried persons who paid more than half of the household expenses during the tax year, were unmarried during the tax year, and had at least one "qualifying person" live with them during the tax year.
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Considerations
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The costs included in the definition of head of household's definition of "household expenses" include home repairs, food, property tax, utility bills, as well as mortgage and rent. Examples of expenses not included are medical bills, life insurance, clothing or education. For the purposes of qualifying for the head of household filing status, a qualifying child must meet the relationship, age, residency, support, joint return test. The child must have lived with you at least 6 months plus one day, be your son, daughter, stepchild, or a descendent of one of these persons, be under 19 at the end of the tax year, cannot have provided more than half of his or her own support during the year, and cannot file a joint return. A qualifying relative is a person for whom you provided support, is a not a qualifying child, is a member of your household, and did not earn income in excess of $3,650.
Filing
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If you file head of household, then you cannot file using Form 1040EZ, only 1040 or 1040A. Check box 4 on either your 1040 or 1040A in the "filing status" section of your return to designate the head of household filing status.
Warning
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Only one person may claim head of household per address. If two or more people claim head of household listing the same address on their income tax return, the IRS will send a notice to all of the taxpayers requesting that that the taxpayer(s) who is not eligible to claim head of household change his filing status via IRS Form 1040X. If the change is not made, then the IRS will conduct an audit to determine which taxpayer is eligible to claim head of household.
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References
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