If you opt to file your tax return using the head of household filing status, the tax rate income brackets expand. That means if you earn up to $50,800, you’ll still be able to remain in the 15% tax bracket, however you must have a dependent to claim HOH. Otherwise, you’d be considered a single taxpayer, and you’d be in the 25% tax bracket at a threshold of only $37,950.
Head of household status requires taxpayers to have at least one dependent and unmarried. One can also be considered unmarried by the IRS if they’ve been separated from their spouse, yet not legally divorced, and haven’t lived in the same residence for the last six months of the year.
To qualify to file as head of household, the taxpayer’s dependent must be a close relative through either birth or marriage. The dependent must live with the head of household for over half of the year, and as the taxpayer, you’re required to pay at least 50% of expenses related to keeping up your home.
These dependent qualifiers are different than other filing statues who chose to claim dependents. In most cases, you are able to claim a parent as a dependent, and the parent isn’t required to live with you; however, to file head of household and use an elderly parent as a dependent, your parent does have to be in your residence for half of the year, unless you have another dependent who lives with you the entire year. Also, the rule that relates to how much you pay to maintain your home only applies to this specific tax filing status.