Taxpayers must choose a filing status that most closely matches their tax situation. For example, married couples can choose to file married filing jointly or married filing separately, while single taxpayers can choose between filing single or head of household. In the following article we will focus on the key features and benefits of the head of household filing status.

Features

Only taxpayers who are single, pay at least half the cost of maintaining their home, and have a "qualifying person" live in their home can claim head of household.

Qualifying Person

A "qualifying person", as defined by the IRS, is a child, stepchild, foster child, adopted child, mother, father, sister, or brother who can be claimed by you as a dependent on your return. Check IRS Publication 17 for more information (see Resources).

Significance

The tax rate for head of household is lower than that of both single and married filing separately. This means that a taxpayer who files head of household generally has a lower tax liability than a taxpayer who files married filing separate or single.

Considerations

Divorced and unmarried parents who share custody of their children should abide by their divorce degree or come to an agreement as to which parent should claim the children and the head of household filing status.

Warning

If more than one person per address claims the head of household filing status, the IRS will contact both parties and request that one taxpayer amend their tax return to change the filing status.

Source:

IRS: IRS Publication 501

IRS: IRS Publication 17

Resource:

IRS: Tips and Guidance for Determing Filing Status