Ever wondered what “Head of Household” means on your tax forms? It’s a special filing status that can actually save you money, but not everyone qualifies! Let’s break it down in simple terms.
First, you generally need to be unmarried, or considered unmarried, on the last day of the tax year. This means if you’re divorced, legally separated, or even married but haven’t lived with your spouse for the last six months of the year, you might qualify.
Second, you must pay more than half the cost of keeping up a home for the entire year. Think rent or mortgage, property taxes, utilities like electricity and water, home insurance, necessary repairs, and even groceries eaten in your home. You’re the primary financial provider for that household.
And finally, the most important part: a “qualifying person” must have lived with you in your home for more than half the year. Usually, this is your dependent child, grandchild, or other qualifying relative. There’s a special rule for a dependent parent; they don’t have to live with you, but you must pay more than half the cost of keeping up their home.
Meeting these conditions means you can file as Head of Household, which often provides a lower tax rate and a higher standard deduction than filing as single. It’s a great way to potentially save money, so see if you qualify!