What Is a Head of Household on Taxes?

Head of household tax rules allow separated, divorced and widowed taxpayers to receive bigger tax savings.

According to the IRS, unmarried taxpayers can file as head of household under certain circumstances to receive more favorable tax treatment. These taxpayers are entitled to a higher deduction amount than individual taxpayers or married persons filing separately.

Significance

The head of household tax treatment applies to unmarried taxpayers. An unmarried taxpayer is defined as a single spouse that did not live with the other spouse for at least six months in the past year. The IRS considers a taxpayer as unmarried if he was separated or divorced during the last day of the year.

Features

The IRS also requires head of household taxpayers to pay more than half of the upkeep and more than half of her overall household costs. Eligible costs include property taxes, rent, utility payments and mortgage payments. Other qualifying costs include food, repairs, insurance and other household costs. You cannot, however, include education costs, medical costs, clothing or transportation. You also can't include rental investment income.

Warning

The IRS requires head of household filers to live with at least one "qualifying person." A qualifying person is a child or relative that is considered a dependent. The IRS also allows a grandchild to be eligible as a qualifying dependent.

However, if the taxpayer's parent is the qualifying person, the IRS allows the dependent-parent to live away from the taxpayer. The IRS provides special rules to allow separate homes, and if the taxpayer paid for a nursing home to care for her qualifying dependent, then the amount of support would count as a qualifying expense.

Effects

The qualifying child must be single and typically, under the age of 8. The child must be considered your dependent under the IRS rules. For custodial parents, the requirements are not difficult to meet, but for non-custodial parents, the child must have frequent overnight visitations for at least half the year.

Considerations

Note that the IRS' head of household determination calendar begins on Jan. 1, 2010, for the 2010 tax year. Dec. 31 counts as 2009’s tax year.

This is general information for educational purposes, and laws can change frequently, so the information should not be used as a substitute for legal advice from a licensed tax attorney in your state.

References

• IRS: Publication 501, Head of Household