Head of Household

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Head of Household is the filing status for each US taxpayer.

To use the filing status of the Head of Household, the taxpayer must:

1. Do not marry or be considered unmarried at the end of the year
2. Has paid more than half the cost to keep the house for the tax year (either home or home from an eligible parent)
3. Usually have a qualified person who lives with the head at home for more than half a tax year unless the qualified person is dependent parents.

Video Head of Household

Benefits

Taxpayers who use the status of the head of the household shall be entitled to use the tax rate of the Head of the Household, which displays larger tax brackets. In addition, the taxpayer is entitled to a larger standard deduction ($ 9,300 for the fiscal year 2016) than the tax payer uses Single or Married Filing Separately ($ 6,300 for 2016).

Maps Head of Household

Considered unmarried

A person who is married on the last day of the tax year should generally use Married Filing Married status or Married Filing Separately. Exceptions are taxpayers who are considered unmarried for the purposes of the filing of the Head of Household and fully qualify as the Head of Household.

In order to be considered unmarried, the taxpayer must meet all of the following tests:

1. The taxpayer must file a separate refund.
2. Taxpayers pay more than half the cost of maintaining homes for the tax year.
3. Taxpayers should not stay at home any time during the last six months of the year.
4. The taxpayer's home is the child's primary home, stepchild, or foster child for more than half a year.
5. A taxpayer must be able to claim an exception for a child. However, this test is still fulfilled if the only reason that the taxpayer can not claim the exemption of a child is that the parent without custody claims an exception (under written release or pre-1985 decision on divorce, separate maintenance decision, or written separation agreement).

A taxpayer may also be considered unmarried for the purposes of the head of the household if the spouse is a non-resident alien, and the taxpayer does not choose to treat the spouse as a foreign resident. In this case, the taxpayer is still considered married for the purpose of earning credit received.

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House keeping

To qualify for the filing status of the Head of Household, the taxpayer must pay more than half the cost to keep the house for a year. Costs to consider include property taxes, credit interest, rent, utilities, repairs and maintenance, insurance, and home-eaten food. Costs such as education, clothing, vacations, and transportation are not included in the cost of maintaining a home.

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Qualified people

The following table sets out who is a qualified person for the filing status of the Head of Household:

(1) Qualification Children MUST meet all tests. For example, a full-time 25-year-old student does not qualify as a child but may qualify as a Relative Qualification if the test is met. See Table 5 Pub 501 (2012). In this case you can not file as HOH. If the test is met, you can apply as a separate filing or marry separately and claim an exception for an unqualified child.

Relative qualified

In addition to the father or mother, the following types of relationships may qualify as dependent on a person eligible for the household head:

• Children, stepchildren, foster children, or descendants of any of them. (Children who are legally adopted are considered as children.)
• Brother, sister, brother, step sister, half-brother, stepbrother.
• Grandfather or a direct ancestor but not a foster parent.
• Stepfather or stepmother.
• The son or daughter of the taxpayer's brother or sister.
• Brother or sister of the taxpayer's father or mother.
• Daughter-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.

Relationships established through marriage do not end with death or divorce.

Custom rule for parents

If the qualified person is the taxpayer's father or mother, the taxpayer may file as the Head of the Household even if the father or mother does not stay with the taxpayer. However, the taxpayer must be able to claim an exception for the father or mother. In addition, the taxpayer must pay more than half the cost to keep the house which is the main house all year round for father or mother. Taxpayers are considered to keep the father or mother's main house by paying more than half the cost to keep parents resting at home for the elderly.

src: canacopegdl.com

References

Source of the article : Wikipedia