What is 'Head Of Household'

Taxpayers may file tax returns as heads of household (HOH) if they pay more than half the cost of supporting and housing a qualifying person. Taxpayers eligible to classify themselves as a head of household get higher standard deductions and lower tax rates than taxpayers who file as single or married filing separately. 

BREAKING DOWN 'Head Of Household'

Head of household is a filing status available to taxpayers who meet certain qualifying thresholds.  They must file separate individual tax returns, be considered unmarried, are entitled to an exemption for a qualifying person such as their child or parent. Further, the HOH must pay more than one-half the cost of supporting the qualifying person and pay more than one-half the cost of maintaining that qualifying person’s primary home.

To be considered unmarried, the HOH must be single, divorced, or considered unmarried. Married taxpayers would be regarded as unmarried if they did not live with their spouse during the last six months of the tax year. The status is further reliant on the head of household's meeting either of these two requirements.

  1. HOH is married to a nonresident alien, who they elect not to treat as a resident alien
  2. The HOH is legally separated under a divorce or separate maintenance decree by the last day of the tax year

Heads of household must pay for more than one-half of the cost of a qualifying person's support and housing costs. These costs include food, clothing, education, and other needs. The HOH must also pay more than one-half of the rent or mortgage, utilities, repairs, insurance, taxes and other costs of maintaining the home where the qualifying person lives for more than half the year. The home must be the taxpayer's own home unless the qualifying person is the taxpayer's parent and the home is the property of that parent. 

HOH filers must be able to claim an exemption for their qualifying person.  Taxpayers may release their exemption to a non-custodial parent in a divorce proceeding or a legal separation agreement and remain eligible to file as head of household.

Savings When Filing as Head of Household

Filing as a head of household can provide significant savings for taxpayers. The 2018 tax rate, currently shown in section 3 of bulletin 2018-10, shows the tax rate for individuals. For HOH's earning $50,000, it is 12%, down from the 2017 rate of fifteen percent. Compare the tax burden shown below for an individual earning $50,000 using the different filing statuses. 

Filing as head of household, the individual will pay $1360 plus 12% of the amount over $13,600 (36,400 x 12% = 4368) for a total tax of $5728.

A married filing separate taxpayer will pay $4453.50 plus 22% of the amount over $38,700 (12,200 x 22% = 2684) for a total tax of $7137.50.

A taxpayer filing at the unmarried, other than surviving spouses, rate, will pay $4453.50 plus 22% of the amount over $38,700 (12,200 x 22% = 2684) for a total tax of $7137.50.

RELATED TERMS
  1. Taxpayer

    A taxpayer is an individual or business entity that is obligated ...
  2. Filing Status

    Filing status is a category that defines the type of tax return ...
  3. Joint Return

    A joint return is a U.S. income tax return that reports the combined ...
  4. IRS Form 4868

    IRS Form 4868 is a form for taxpayers who wish to extend their ...
  5. Married Filing Jointly

    Married filing jointly is a filing status for married couples ...
  6. Standard Deduction

    The IRS standard deduction is a portion of income that is not ...
Related Articles
  1. Taxes

    20 Tax Changes You Need To Know About

    Don't miss out on the tax changes. Here's a list that you need to know about.
  2. Financial Advisor

    IRS Allows Mortgage Deduction for Unwed Couples

    Single taxpayers who co-own one or more of their homes with another person can now each claim a deduction for the mortgage interest.
  3. Taxes

    Why Do So Many People Fall Behind On Their Taxes?

    Despite the threat of owing thousands of dollars to possibly the most feared organization in the U.S., millions of Americans continue to fall behind on their taxes.
  4. Taxes

    What's IRS Form 1040 For?

    Most U.S. taxpayers will be familiar with the 1040. By the end of filling it out, you'll know how much tax you owe, or what your refund is.
  5. Taxes

    How Obamacare Is Raising Your Taxes

    There are literally dozens of new, amended or broadened tax provisions under the Obamacare legislation. Find out how your taxes will be affected in the years to come.
  6. Personal Finance

    Newlyweds? Tips For Filing Your Tax Return

    For many couples, it pays to file for taxes together. But what are some of the obstacles you should watch out for?
  7. Taxes

    Newly Divorced? How To File Your Taxes

    Divorce is a rough transition. Make the tax changes as easy as possible with these tips.
  8. Taxes

    Start Over With The IRS

    If you're struggling to pay back taxes, try a fresh start with the IRS. They really can help.
  9. Taxes

    Smart Year-End Tax Moves for 2016 (Part Two)

    Here's are some crucial tax planning strategies for investments, Social Security and Medicare.
  10. Taxes

    Divorced? 7 Tax Traps to Avoid

    Filing your taxes is complicated enough, but it can become even more challenging after a divorce.
Trading Center