What is Head of Household?

While filing taxes you may come across the tax term "head of household," and you might be wondering how this term applies to you and your taxes.

The term, head of household can also sometimes be abbreviated to be HOH. It is a tax term used to indicate who the primary income provider is in a household. In taxes, a household means the same thing it usually means, a group of people or family that live in the same house together as a unit. This doesn't include roommates but rather qualifying persons like you and your partner, children, or other family members or dependents you would consider part of your household family.

What is Head of Household?

When it comes to taxes, the head of household status is used to indicate a tax filing status for an individual. Each household has what's considered the head of the house when it comes to income and taxes. This indicates that a person is the primary source of income for a single household. Seems pretty simple right? But keep reading because there are a few requirements you'll need to understand first before you know whether you qualify for this tax filing status.

Head of Household Requirements

The head of household filing status is a title meant for individuals who are the primary support for their household but aren't necessarily married or filing jointly with a partner. So being the head of a household as a married couple is different than being the "head of household" where tax returns are involved. 

Just because someone is filing an individual tax return, that doesn't mean they don't have dependents and a household that they financially take care of and support. This is where this tax filing status comes in to help these types of individuals gain access to tax benefits as the main financial support for their own dependents. Some of those benefits include higher tax deductions, lower tax rates, and potentially higher tax refunds

  • File a separate individual tax return
  • Be unmarried 
  • Have a qualifying dependent or child living in your house
  • Pay for more than half of the household expenses and dependent support and care.

Head of Household vs Single

Relationships come with many different definitions and in order to file tax returns correctly, some of those relationship definitions needs to be included in the tax filing process. One example of this is with head of household vs single. In order to use the HOH title, you need to also be single or at least considered single in the instances of your tax status.

To qualify for this filing status, you will need to be considered unmarried. To be considered unmarried to the IRS, you could be single, divorced, or you could be separated from your married spouse.

To be considered officially separated and therefore "considered unmarried" to the IRS, you'll need to have lived separately from your spouse for at least the last 6 months of that tax year.

You could also technically be "considered unmarried" when preparing taxes if you are married to someone who is not a citizen of the US and who you would like to not treat as a citizen while filing. 

Whether you are considered a "single" taxpayer or not is one of those instances. Single taxpayers are taxpayers that are unmarried or are considered unmarried by the IRS. This could include several different situations as explained above including: 

  • You are single.
  • You are divorced.
  • You are married but separated.
  • You are married to a noncitizen.

Head of Household vs Dependent 

The second key variable in whether you get to claim this status or not has to do with head of household vs dependents. To qualify as an HOH, you can't just be single and considered unmarried, you'll also need to have a qualifying dependent that you financially support and care for in your same house with you. 

Someone qualifies as a dependent in your house when you've paid over half of the household's costs and the dependent's financial support for that year. This includes more than half of expenses like: 

  • Mortgage payments
  • Rent payments 
  • Utilities 
  • Household repairs 
  • Home insurance 
  • Health insurance

Dependents are often children that live in the home, but sometimes a dependent can be an adult with disabilities, a parent that needs taken care of, or another family member that requires your care and financial support. 

Tax Filing Status and Head of Household

It is important to note that filing as a head of household on your taxes is different than filing as single or married filing separately. There are 5 different types of tax filing statuses that you can choose from when preparing your tax return each year. They include the following: 

  1. Single
  2. Married Filing Jointly
  3. Married Filing Separately
  4. Head of Household
  5. Qualifying Widow(er)

Each status comes with its own tax benefits to consider. There are tax deductions, tax exemptions, and even tax credits that each status might help qualify you for. Filing as head of household, single, or married filing separately might seem like similar things, but they all mean slightly different things when it comes to the tax world. 

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For example, depending on your status you could get a higher standard deduction. Someone who makes $70,000 a year who files as a head of household in 2021 could get a standard deduction of $18,800. But if that same person files as single or married filing separately than they could get a standard deduction of $12,550 instead. The amount of taxable income could also change depending on your tax bracket and status. 

It's instances like these when it's important to know your true tax filing status so you can get all the correct tax benefits for you and your specific situation.

In Conclusion, 

Don't go into your tax filing without a full understanding of what benefits and statuses you qualify for. That's why hiring tax professionals to help you navigate returns and refunds can help keep you from missing out on any tax advantages available to you.