Using the head of household filing status on your taxes could result in your having a lower taxable income and a higher refund than if you file as a single taxpayer. However, there are certain criteria you must meet to be eligible to use that status. You must pay for at least half of your household expenses, be considered unmarried for the tax year and have at least one qualifying child or dependent.
Let’s take a closer look at each of these criteria and what else you need to know as you work with an accounting firm in Union City, NJ to prepare and plan for your taxes.
Child or dependent
What does the term “qualifying” mean when we refer to a “qualifying” child or dependent? To be a qualifying dependent, the child must meet the following requirements:
- The child is a biological child, stepchild, sibling, step sibling, foster child, half sibling or descendent of one of the aforementioned relatives.
- The child lived with you in your home for at least six months during the tax year.
- The child is younger than you.
- The child is under 19 if not a student, and under 24 if a full-time student.
- The child may not have paid for more than half of his or her living expenses over the course of the tax year.
If you cannot claim your child as a dependent, you may still be eligible to file your taxes as head of household as long as he or she lived with you for more than half the year.
You must pay at least half the expenses involved in maintaining your home during the tax year to qualify for head of household filing status. This covers all household maintenance bills, including rent/mortgage, utilities, taxes, insurance, repairs, groceries and other everyday household expenses. If you receive any sort of financial assistance, you are still able to qualify so long as more than 40 percent of the bills are paid with your own money.
The technical language the IRS uses to determine eligibility for head of household status is that you must have been “considered unmarried” for the tax year in question. To be “considered unmarried,” you must meet the following requirements:
- You file your own separate tax return.
- You paid more than half of the costs associated with keeping up your home.
- Your spouse did not live in the home for the final six months or more of the tax year.
- Your home was your main home for at least six months of the tax year.
- You are able to claim the child as a dependent.
If you and your spouse did live in separate homes due to instances such as business trips, medical stays, college or military service, you’ll still be considered married.
For more information about filing your taxes with the head of household filing status, or to arrange a consultation with our accounting firm in Union City, NJ, reach out to the team at Kedean’s Generation today.
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