Head of Household filing status is beneficial to taxpayers who qualify because the income brackets expand. For example, a taxpayer filing head of household can earn up to $50,800 and remain in the 15% tax bracket. One requirement: You MUST claim a dependent to file using the head of household status. If not, you’re required to use the single status, and will be taxed at 25%, as the threshold is $37,950.
To claim head of household, you must have at least one dependent and not be married. If you’re separated from your spouse, though not legally divorced yet, you may be considered unmarried by the rules of the IRS. You need to have lived separately from your spouse, in a different residence for at least the final six months of the year.
To be a qualifying dependent, the individual must be closely related to the taxpayer either through birth or marriage. Additionally, they must live with the taxpayers claiming HOH for over half of the year, and the taxpayer has to be responsible for paying a more than 50% of the household expenses.
Other filing statuses abide by different dependent qualifications. For example, under many filing statuses you can claim an elderly parent as a dependent, and they are not required to live in the same household. However, to claim a parent under head of household, the parent does need to live with you at least half the year, similar to other dependents in this status. You can claim a parent if you have another dependent who lives with you for the entire year. Head of household status is the only filing status that directly relates to how much you pay towards expenses to maintain your home.