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HEAD OF HOUSEHOLD STATUS

Are you single with a child, that you support for more than half the year? You may qualify* to lower the amount of taxes you owe.

mother with daughter doing taxes

Filing your taxes as Head of Household (HOH) can be a powerful way to reduce your tax liability, especially if you're a single parent or provide support for dependents. In this Q&A style guide, we'll explore the qualifications, benefits, and filing tips for the HOH status.

What is the Head of Household (HOH) filing status, and why is it important?

The HOH status is a filing option available to individuals who are considered unmarried for tax purposes and provide the primary financial support for dependents. This status often results in lower tax rates and higher standard deductions, which can significantly reduce your tax bill.

To qualify as HOH, you must meet the following criteria:

    • You must be unmarried or considered unmarried on the last day of the tax year.
    • You must have paid more than half the cost of maintaining a household for the entire year.
    • You must have a qualifying child or dependent who has lived with you for more than half of the year.

Filing as HOH offers several benefits, including:

    • Lower tax rates compared to the single or married filing separately statuses.
    • A higher standard deduction, which reduces your taxable income.
    • Eligibility for certain tax credits, such as the Earned Income Tax Credit (EITC).

Can you claim HOH if you have joint custody of your child?

Yes, you can potentially claim HOH if you have joint custody of your child. The key is that the child must live with you for more than half of the year, and you must provide the primary financial support. The custodial parent generally claims HOH status.

What are some tips for successfully filing as Head of Household?

    • Keep accurate records of your financial support and living arrangements.
    • Understand the definition of a "qualifying child" or dependent for tax purposes.
    • Consult with a tax professional to navigate any complex situations or questions.

Strategies for Maximizing Head of Household Benefits

Optimize Your Deductions:

As a Head of Household (HOH) filer, you're entitled to a higher standard deduction. To make the most of this, maintain meticulous records of all qualifying expenses. These may include healthcare costs, state and local taxes, and charitable contributions. By doing so, you can ensure that you're leveraging every available deduction to lower your taxable income.

Explore Tax Credits:

Don't overlook the array of tax credits available to HOH filers. These can be directly subtracted from your tax bill, providing more significant savings than deductions. Delve into credits like the Earned Income Tax Credit (EITC), which can provide substantial benefits, especially if you have dependents. Additionally, investigate the Child and Dependent Care Credit, and the Education Credits, which can further reduce your tax liability.

DETERMINE IF YOU'RE CONSIDERED HEAD OF YOUR HOUSEHOLD

If you have questions or need assistance with understanding and filing as HOH, Liberty Tax’s experts are here to help. Contact us for personalized guidance on optimizing your tax situation through the Head of Household status.

Common Mistakes to Avoid

Filing Incorrectly:

One common mistake is filing as HOH when you don't meet the qualifications. Ensure you meet all the criteria before selecting this status.

Lack of Documentation:

Insufficient records of financial support and living arrangements can lead to issues with the IRS.

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*Each persons tax situation is unique and not everyone is qualified to file as Head of Household. To qualify, you must pay for more than half of the household expenses; be considered unmarried on the last day of the tax year; and you must have a qualifying child or dependent. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.