If you are like most people, just thinking about taxes can increase your stress. And that stress can start at the very beginning of the federal tax forms, right at Box 4. Whether you are using the 1040A or the 1040, the same question pops up in that box: filing status. There are five options to choose from here: Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Widow(er) With Dependent Child. Most of the options seem pretty clear, but head of household is a bit murky.
What Does Head of Household Mean?
In its simplest form, head of household means you are an unmarried individual responsible for the care and costs associated with another family member, typically a child. The IRS recognizes the burden this places upon a person, and as a result qualifying for head of household will increase your standard deduction.
Though the exact amount of the increase changes from year to year, it is typically around $3,000 more than filing as single. For example, in the year of publication, the standard deduction for filing single was $7,750, while the the standard deduction for filing head of household was $10,650.
You can claim head of household on your taxes if you meet three requirements:
- Marriage status
- Qualifying person designation
- Cost of keeping up a home
There are a number of ways to meet the marriage status requirement. The most straightforward way is to be single or divorced. However, a legal separation also qualifies you to file head of household, if you pass the other tests. One final option is to be married but living apart from your spouse for the last six months of the tax year.
It is not unusual for the IRS to request supporting documentation to support the assertion you have not lived with your spouse for the last six months of the tax year, so be prepared to present proof.
One of the more common misconceptions about the head of household filing status surrounds the determining the qualifying person. This is not the same as a dependent. A person can be your dependent and not be a qualifying person. For you to qualify as head of household, a qualifying person needs to live in your home for more than half the year, and only certain types of closely related relatives can be qualifying persons for the head of household filing status. A qualifying person is a:
- Child, stepchild, adopted child, foster child, brother or sister, or a descendant of one of these whom you claim as a dependent.
- Mother or father who can be claimed as a dependent under the qualifying relative rules.
- Brother, sister, grandparent, niece or nephew whom you can claim as a dependent under the qualifying relative rules.
Refer to Table 4 in IRS Publication 501 for a well-laid out chart regarding qualifying persons.
Cost of Keeping Up a Home
To meet the cost of keeping up a home requirement, you must have paid more than half the cost of maintaining a home for the tax year. In other words, public assistance and the help of friends and family must not exceed the funds you provided in the upkeep of your own home. A classic example of how you might not meet this requirement is when a recently divorced parent and child live with parents as a first step toward re-establishing independence. Typical costs you can consider include rent, mortgage payments, property taxes, property insurance, repairs, utilities and groceries.
Do not include clothing, education, medical care, vacations, life insurance and transportation expenses in your calculation for this requirement.
Choosing Head of Household
If you believe you qualify for head of household, it is simple to select this filing status on your taxes. On both the 1040 and 1040A form, Box 4 represents the head of household status. Check that box, and list the name of the dependent in the box immediately to the right of the check box.
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