How You Can File as Head of Household
Understanding the concept of filing as head of household is crucial for many taxpayers, as it can significantly reduce your taxable income and potentially lower your tax bill. This guide will walk you through the process, eligibility criteria, and benefits of filing as head of household.
Eligibility Criteria
Before you can file as head of household, you must meet certain criteria set by the IRS. Here’s what you need to know:
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You must be unmarried or considered unmarried on the last day of the year.
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You must have paid more than half the cost of keeping up a home for yourself and a qualifying person.
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The qualifying person must either be related to you or have lived with you for more than half the year.
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The qualifying person cannot be your child’s dependent, unless you’re claiming an exemption for them as a qualifying child.
Qualifying Person
A qualifying person can be your child, stepchild, foster child, sibling, half-sibling, step-sibling, or a descendant of any of these individuals. They must meet the following requirements:
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Be under the age of 19 and younger than you, or under the age of 24 if a full-time student.
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Not have provided more than half of their own support during the year.
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Have lived with you for more than half the year.
Benefits of Filing as Head of Household
Filing as head of household offers several tax benefits, including:
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A higher standard deduction compared to single filers.
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Lower tax rates on long-term capital gains and qualified dividends.
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Access to the earned income tax credit, which can significantly reduce your tax liability or result in a refund.
How to File as Head of Household
Now that you understand the eligibility criteria and benefits, let’s go over the steps to file as head of household:
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Check if you meet the eligibility criteria. If you do, proceed to the next step.
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Complete Form 1040 or Form 1040-SR, which are the standard tax forms for individuals.
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On line 11 of Form 1040 or line 12 of Form 1040-SR, enter “HOH” to indicate that you’re filing as head of household.
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Fill out Schedule H, which is used to calculate your tax as head of household. This form is attached to your Form 1040 or 1040-SR.
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Follow the instructions on Schedule H to determine your taxable income and calculate your tax liability.
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Attach Schedule H to your Form 1040 or 1040-SR and mail it to the IRS.
Example
Let’s say you’re a single taxpayer who paid more than half the cost of keeping up a home for yourself and your 18-year-old daughter, who lived with you for more than half the year. You meet the eligibility criteria for head of household. Here’s how you would file:
| Form | Line | Entry |
|---|---|---|
| Form 1040 | 11 | HOH |
| Schedule H | Line 1 | Standard Deduction for Head of Household ($13,850 for 2021) |
| Schedule H | Line 2 | Adjusted Gross Income |
| Schedule H | Line 3 | Subtract Line 2 from Line 1 |
