There’s often confusion around who can file as head of household (HOH). Just because you’re on your own, and paying rent or a mortgage, doesn’t necessarily mean you qualify for this filing status. Certain requirements must be met for you to take advantage of the tax benefits extended to this status. Falsely claiming HOH status can be costly, so be sure you’re eligible before submitting your return. Here’s what you need to know.
Head of Household Benefits
Filing as head of household has two main financial benefits. First, you’ll receive a more favorable tax rate compared to that of a single filer (if you’re lower income). For example, a single taxpayer who makes less than $11,000 has a tax rate of 10% (2023). A taxpayer who files under HOH, however, can make up to $15,700 and pay the same rate. The divide is even wider at the 12% tax rate.
|Tax Rate||Single Taxable Income||Head of Household Taxable Income|
|10%||$0 – $11,000||$0 – $15,700|
|12%||$11,001 – $44,725||$15,701 – $59,850|
The second benefit is that you’ll be able to claim a higher standard deduction. For the 2023 tax year, the standard deduction is $13,850 if you file as single or married filing separately. As HOH, you can claim $20,800. That’s an additional $6,948 off your taxable income.
Can I File as Head of Household If I Rent?
Yes! You do not have to own your home to claim HOH filing status. Whether you live in an apartment or in a rented room in someone else’s home, if you meet the requirements below you’ll be eligible to file as head of household.
Head of Household Requirements
To file as head of household, you’ll need to meet the following requirements:
- Be single or “considered unmarried” by the last day of the tax year;
- Pay more than half of the household expenses, and;
- Have a qualifying child or dependent.
Household expenses include not only your rent or mortgage payment, but also utilities, insurance, property taxes, maintenance costs, and food.
What Does “Considered Unmarried” Mean?
If you are not single or legally divorced by the end of the tax year, the IRS will consider you unmarried if the following are true:
- You file a separate return from your spouse.
- You paid more than half of the household expenses.
- Your spouse did not live in the home for the last six months of the tax year.
- Your qualifying child or dependent lived with you for more than half of the tax year.
- You can claim an exemption for your child or dependent.
Under certain circumstances, you may still qualify even if you can’t claim the exemption. This typically happens in situations where parents take turns claiming the child(ren) for tax purposes. If there’s only one child, however, only one parent can claim head of household.
Who Qualifies as a Child or Dependent?
It’s important to note that a qualifying child or dependent may extend beyond your biological children. Adopted and foster children, as well as stepchildren, siblings (full, half, or step), and descendants are also accepted. To be considered a qualifying child, they must also:
- Live with you for more than six months during the tax year.
- Be younger than you.
- Be 18 or younger, or a full-time college student under the age of 24.
- Pay less than half of their living expenses during the year.
If the child meets all of the above requirements except for age, they may still qualify if they are permanently and totally disabled. Other relatives may also qualify as a dependent if they lived with you for more than half of the year. This includes your parent (biological, step, or in-laws), nieces, nephews, aunts, uncles, and immediate in-laws (son, daughter, brother, or sister).
You may also be able to claim head of household if you paid more than half the cost to maintain your parent’s home or the care facility where they resided, even if they didn’t live with you in your home.
If you’re unsure whether you qualify for head of household filing status, it’s best to consult with a tax professional. Improper filing can lead to a tax audit and/or tax penalties. For more information or help filing your tax returns, call Tax Defense Network at 855-476-6920 for a free consultation and quote.