The term head of household refers to a filing status used by certain taxpayers for federal tax purposes. It provides certain tax benefits, such as a lower tax rate and higher standard deduction than a single taxpayer.
In order to qualify for the head of household filing status, a taxpayer must meet certain criteria. Primarily, the taxpayer must be unmarried and must provide a home for qualifying dependents who are either children or other dependents (such as a dependent parent or grandparent).
The head of household filing status can result in lower taxes for the taxpayer. In most cases, the adjusted gross income (AGI) for a married couple filing separately is higher than the AGI of a single head of household. In addition, a single head of household is eligible for a higher standard deduction than a married couple filing jointly or a single taxpayer.
Also, the head of household filing status can be beneficial in other ways. For example, if the taxpayer is eligible for certain tax credits or deductions, they may be able to take those credits or deductions at a higher rate than a married couple filing jointly or as a single taxpayer. Additionally, a single head of household may be eligible for the earned income tax credit, which can further reduce taxes.
The head of household filing status can be a great way to reduce taxes and take advantage of certain tax benefits. However, it is important to understand the criteria necessary to qualify and to make sure that you are filing correctly. Before filing, be sure to consult with a tax professional to ensure that you are taking advantage of all the benefits you are entitled to.