What Is a Breadwinner?
A breadwinner is a colloquial term for the primary or sole income earner in a household. Breadwinners, by contributing the largest portion of household income, generally cover most household expenses and financially support their dependents.
- A breadwinner is a person in a household who brings in the lion's share of income and thus supports the family financially.
- In the past, the breadwinner referred mainly to a single-income family where the other spouse remained at home.
- Today, breadwinners can be women or men, or both together.
- Depending on how income is produced, taxes levied on the breadwinner(s) can differ.
Understanding a Breadwinner
The term breadwinner is sometimes used to refer to single-income families in which one of the members works to generate income and the other stays at home to care for dependents. In other situations, a household may be a dual-income household but have only one breadwinner.
In dual-income households, the breadwinner is the one with the more profitable and economically sound job. The other income earner, who may be working part-time or can afford to leave the workforce, is simply “earning,” but not necessarily a breadwinner.
Breadwinner as Head of Household
For tax purposes, a breadwinner may file their taxes as head of household. The Internal Revenue Service (IRS) defines head of household as a single or unmarried taxpayer who pays at least 50% of the costs of supporting a household and provides support to other qualifying family members living under the same roof for more than half of the year.
This means that the breadwinner must have paid more than half of the total household bills, including rent or mortgage, utility bills, insurance, property taxes, groceries, and repairs. Some examples of qualifying family members include a dependent child, grandchild, brother, sister, grandparent, or anyone else you can claim as an exemption.
Heads of households benefit from a lower tax rate. For instance, in 2021, the 12% tax bracket applies to single filers with an adjusted gross income (AGI) of between $9,950 and $40,525 for the tax year (increasing to $10,275 and $41,775 in 2022). The 12% tax bracket for heads of households, meanwhile, applies to AGI that falls between $14,201 and $54,200 (increasing to $14,650 and $55,900 in 2022). In other words, an individual that earns $50,000 will pay 12% income tax as a head of household and 22% if filing as a single individual.
For 2021, the head of household standard deduction is $18,800 (increasing to $19,400 in 2022), which is significantly higher than the $12,550 (increasing to $12,950 in 2022) standard deduction single filers and married individuals who file separate returns can claim. Married taxpayers who file joint returns get a $25,100 deduction (increasing to $25,900 in 2022). This works out as a $12,550 deduction for each of them, still well below the head of household amount.
Married Breadwinner Filing Jointly or Separately
Tax law was designed to benefit married couples with one main breadwinner and one stay-at-home spouse. If one spouse isn’t working or was starting a business and had losses, the couple will benefit when filing jointly.
A married taxpayer who is the breadwinner of the household may choose to file taxes jointly with their spouse, rather than separately, to reduce the tax liability. Breadwinners may find that they are in a higher tax bracket if they file taxes separately—the higher the tax bracket, the higher the tax bill.
As you can see in the table below, a breadwinner who earns $78,000 in annual income and files jointly with a stay-at-home spouse will pay 12%. Should, however, the same breadwinner choose to file separately, the tax rate applied to this income would be 22% instead.
|2021 Tax Brackets|
|Tax Rate||Married Filing Jointly||Married Filing Separately|
|10%||$0 - $19,900||$0 - $9,950|
|12%||$19,901 - $81,050||$9,951 - $40,525|
|22%||$81,051 - $172,750||$40,526 - $86,375|
|24%||$172,751 - $329,850||$86,376 - $164,925|
|32%||$329,851 - $418,850||$164,926 - $209,425|
|35%||$418,851 - $628,300||$209,426 - $523,600|
|37%||$628,301 +||$523,601 +|
There are times when filing separately from a spouse makes the most sense, such as when one person has expensive costs related to deductions based on AGI. For instance, medical expenses can only be deducted if they exceed 7.5% of your AGI. If a spouse has high medical bills, the joint income may be high enough that the breadwinner is unable to take advantage of that deduction. In such cases, filing separately might be appropriate.
Why Is It Called a "Breadwinner"?
The term is thought to have originated in the U.K. in the 1820s. At the time, and even today, bread is considered a staple food item. As such, the person who brought home the bulk of the money for a family, therefore, was bringing home the bread, so to speak.
What Is a Head of Household?
Head of household is a qualifier designated by the Internal Revenue Service that refers to an individual in a home that is single or unmarried, pays 50% or more of expenses, and has dependents. A head of household pays lower taxes than a regular single filer and has higher standard deductions.
What Is a Qualifying Dependent for Head of Household?
A qualifying dependent for a head of household is most often a child. This can be a biological child or step-child, however, it does not only have to be a child. It can be a sibling, step-sibling, a niece or nephew, and in general anyone that is dependent on you.
Internal Revenue Service. "Publication 501: Dependents, Standard Deduction, and Filing Information," Pages 8-10. Accessed Jan. 3, 2022.
Intuit Turbo Tax. "Guide to Filing Taxes as Head of Household." Accessed Jan. 3, 2022.
Internal Revenue Service. "IRS Provides Tax Inflation Adjustments for Tax Year 2022." Accessed Jan. 3, 2022.
Internal Revenue Service. "IRS Provides Tax Inflation Adjustments for Tax Year 2021." Accessed Jan. 3, 2022.
Internal Revenue Service. "Publication 501: Dependents, Standard Deduction, and Filing Information," Page 6. Accessed Jan. 3, 2022.
Internal Revenue Service. "Topic No. 502 Medical and Dental Expenses." Accessed Jan. 3, 2022.