Filing Status
This is of course could be the greatest misunderstood of filing statuses. Or at least one would think considering how many misuse the claim. Let’s examine so you don’t make this mistake.
The IRS defines this as:
Head of Household
1. You are unmarried or “considered unmarried” on the last day of the year.
2. You paid more than half the cost of keeping up a home for the year.
3. A “qualifying person” lived with you in the home for more than half the year (except for temporary absences, such as school). However, if the “qualifying person” is your dependent parent, he or she does not have to live with you.
Head of household is a status held by the person in a household who is running the household and looking after a qualified dependent. In order to qualify as head of household, the designated household must be located at the person’s home and the person must pay more than 50% of the costs involved in running the household. The benefit of having the head-of-household status is that it can result in lower tax rates.
Typically, the head of a household must also be unmarried. However, in certain situations, a married person can be the head of household. In addition to the requirements listed above, the married person must also file an individual tax return and the spouse of the married person must not have lived with the person for the last six months of the calendar year.
1. Considered unmarried means on the last day of the year if you are divorced under a final decree, you are considered unmarried for the whole year. So on December 31st of whatever year, if your divorce is finial, you are considered unmarried in the eyes if the IRS.
2. More than half the cost means just that. If you paid 50.1% to maintain the home then, you paid more. If you were divorced in October, the divorce finalized December 30th, make sure that for the year your spouse who is no longer in the home (?) paid more than one half of the cost for the total year. This is a case often misused.
An example: A husband, wife, two children home, and only one spouse worked. In mid July the working spouse filed for divorce and left the home to the other spouse and the children. The spouse with the children would not be able to claim Head of Household because they did not pay for more than half the cost of keeping up the home.
3. A qualifying person living in the home is another highly misused aspect of this status. A qualifying person as described by the IRS is:
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IF the person is your . . . |
AND . . . |
THEN that person is . . . |
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qualifying child (such as a son, daughter, or grandchild who lived with you more than half the year and meets certain other tests) 2 |
he or she is single |
a qualifying person, whether or not you can claim an exemption for the person. |
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he or she is married and you can claim an exemption for him or her |
a qualifying person. |
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he or she is married and you cannot claim an exemption for him or her |
not a qualifying person. 3 |
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qualifying relative 4 who is your father or mother |
you can claim an exemption for him or her 5 |
a qualifying person. 6 |
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you cannot claim an exemption for him or her |
not a qualifying person. |
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qualifying relative 4 other than your father or mother (such as a grandparent, brother, or sister who meets certain tests). |
he or she lived with you more than half the year, and he or she is related to you in one of the ways listed under Relatives who do not have to live with you on page 14, and you can claim an exemption for him or her 5 |
a qualifying person. |
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he or she did not live with you more than half the year |
not a qualifying person. |
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he or she is not related to you in one of the ways listed under Relatives who do not have to live with you on page 14 and is your qualifying relative only because he or she lived with you all year as a member of your household |
not a qualifying person |
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you cannot claim an exemption for him or her |
not a qualifying person. |
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1A person cannot qualify more than one taxpayer to use the head of household filing status for the year. |
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2The term “qualifying child” is defined under Exemptions for Dependents, later. Note: If you are a noncustodial parent, the term “qualifying child” for head of household filing status does not include a child who is your qualifying child for exemption purposes only because of the rules described under Children of divorced or separated parents under Qualifying Child, later. If you are the custodial parent and those rules apply, the child generally is your qualifying child for head of household filing status even though the child is not a qualifying child for whom you can claim an exemption. |
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3 This person is a qualifying person if the only reason you cannot claim the exemption is that you can be claimed as a dependent on someone else’s return. |
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4The term “qualifying relative” is defined under Exemptions for Dependents, later. |
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5If you can claim an exemption for a person only because of a multiple support agreement, that person is not a qualifying person. See Multiple Support Agreement. |
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6See Special rule for parent for an additional requirement. |
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If you still have questions about whether or not you can claim Head of Household, please contact me or your personal tax preparer.
This is a re-post from 08/25/08
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