If you are unmarried, or married but considered unmarried (see below) on the last day of the tax year, you can file Head of Household if the following conditions apply:
(a) You paid more than half the costs of keeping up a home for the tax year, and
(b) A qualified person (see definition below) lived with you for more than half of the tax year.
Filing Head of Household can have substantial financial benefits over filing as a single status taxpayer. In filing as Head of Household, one enjoys lower tax rates and a larger Standard Deduction.
In determining the cost of keeping up a home, you may include costs such as mortgage interest, real estate tax, home insurance, repairs, utilities, and food. You cannot include amounts you paid for clothing, education, medical treatment, vacations, life insurance, transportation, or the rental value of your home. In determining the amount you paid in keeping up the house, you must exclude any payments received from public assistance.
Definition of a Qualifying Person
To choose the Head of Household filing status, the general rule is that you must have a qualifying person living with you for at least half of the year. A qualifying person includes any of the following:
• An unmarried child, including your own child, grandchild, stepchild, or foster child. The child does not necessarily have to be a dependent on your tax return, but must live with you. (For example, the child could be claimed by the other parent, but you would still be able to claim the Head of Household filing status, as long as the child lived with you.)
• A married child, including your own child, grandchild, stepchild, or foster child. In this case, the child must be a dependent on your tax return.
• A relative who is a dependent on your tax return, such as your parent, grandparent, brother, sister, stepbrother, stepsister, half-brother or half-sister, niece or nephew.
Parent Not Living With You
There is one exception to the rule that your dependent must live with you to qualify you for the Head of Household filing status. You can file as Head of Household even if your parent does not physically live with you, as long as you paid more than half the cost of keeping up a home that was the parent’s main home for the entire year. For example, your parent could be living in a rest home or home for the elderly.
You and your qualifying person are still considered to live together even if one or both of you are temporary absent from the home, due to special circumstances such as illness, education, business, vacation, or military service.
Married Considered Unmarried
This is a very important exception to the rule that married people, who decide not to file a joint return together, must file Married Filing Separately. If you are married and separated from your spouse, under tax law you may be considered unmarried, if certain conditions are met. This means that you could qualify to file HOH instead of MFS, and will not be subject to the disadvantages of the MFS filing status.
The primary objective of this article is to empower taxpayers to learn to do their own taxes. For information on how to choose the correct filing status, grab yourself a copy of “Doing Your Own Taxes is as Easy as 1, 2, 3,” ($6.98) on TaxConnections.com.