Benefits of Claiming Head of Household

Tax season is quickly approaching. Every year taxpayers search for receipts and deductions to maximize their refund. The most common mistake on tax returns is a taxpayers filing status.

When filing personal income taxes there are four basic filing status one can be classified as: single, married, widowed, or head of household. Choosing the right filing status will help ensure you are getting the proper refund and that you are in the right tax bracket for your household.

To qualify for head of household a tax payer must meet certain requirements. The taxpayer must:

1. be unmarried

2. have at least one dependent child

3. must provide more than half the cost of maintaining a home for a qualifying dependent.

There are other circumstances that are considered that may help a taxpayer qualify for head of household. Such circumstances are that a taxpayer may:

1. be married, and file a separate return if their spouse did not live in the home during the last 6 months of the tax year.

2. provide more than half the cost of maintaining a home for a qualifying dependent.

Filing head of household does come with advantages when preparing personal income tax returns. Mainly these advantages are financial. If you qualify to file head of household you would fall into a wider tax bracket. This wider tax bracket makes a taxpayer eligible to deduct a larger personal exemption which would increase his/her tax refund.

Fining head of household by being unmarried and having a dependent child may also qualify a taxpayer for the earned income tax credit. This is a refundable tax credit for low-income workers with dependents that offsets the burden of paying taxes throughout the year. However, by filing head of household your child tax credit may be higher than those taxpayers who file single, or married filing separately. The reason head of households EIC is slightly higher is that the government gives a bigger tax break to single working parents with dependents. This is a big advantage to filing head of household.

Tax season does not have to be stressful. By knowing your filing status, what exemptions you can claim, and by itemizing your deductions before filing your personal taxes will help make this a less stressful time of year. Tax payers should educate themselves on new tax laws that develop each year that could impact their tax refund in a substantial way.