Head of Household (HOH)

Demystifying Head of Household (HOH) Tax Filing Status

Understanding Head of Household (HOH)

The Head of Household (HOH) tax filing status offers significant advantages for eligible taxpayers, providing higher standard deductions and lower tax rates compared to filing as single or married filing separately. To qualify as HOH, taxpayers must meet specific criteria outlined by the Internal Revenue Service (IRS).

Qualifying as Head of Household

To file as HOH, individuals must:

• Be unmarried or considered unmarried for tax purposes.
• Provide financial support for a qualifying dependent, such as a child or parent.
• Cover more than half the cost of supporting and housing the qualifying person.

Unveiling the Criteria

Unmarried Status

Being unmarried entails being single, divorced, or legally separated by the end of the tax year. Certain circumstances, such as living apart from a spouse for the last six months of the tax year, may also qualify a married taxpayer as unmarried for tax purposes.

Financial Support for a Qualifying Person

HOH filers must bear the majority of expenses associated with supporting and housing a qualifying person. This includes covering more than half of the individual's support costs and maintaining their primary residence for over half the year.

Impact of Tax Reform

The enactment of the Tax Cuts and Jobs Act of 2017 suspended the personal exemption, affecting HOH filers' eligibility criteria. While HOH status previously required claiming a personal exemption for the qualifying person, this requirement has been suspended until 2025.

Evaluating Tax Savings

Filing as HOH can lead to substantial tax savings, as demonstrated by a comparison of tax burdens for individuals earning $70,000 under different filing statuses. HOH filers benefit from higher standard deductions and lower tax rates, resulting in significant reductions in their overall tax liabilities.

Who Qualifies as Head of Household?

To qualify as HOH, individuals must meet specific criteria established by the IRS, including being unmarried, providing financial support for a qualifying dependent, and covering more than half the household expenses.

Is It Better to File as Single or Head of Household?

For tax purposes, filing as HOH generally offers greater benefits compared to filing as single, including lower tax rates and higher standard deductions, leading to reduced tax liabilities for eligible taxpayers.

Exploring Standard Deductions

HOH filers enjoy a standard deduction of $18,800 for the 2021 tax year, increasing to $19,400 for the 2022 tax year. These deductions play a crucial role in minimizing taxable income and maximizing tax savings for eligible taxpayers.