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The IRS provides five options: Single, married filing jointly, married filing separately, head of household and qualifying widow or widower with dependent child.
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The head of household status can lead to a lower taxable income and greater potential refund, but to qualify, you must meet certain criteria.
Filing as a head of household can have substantial financial benefits over filing as a single status taxpayer. As a head of household, one may obtain a more generous tax brackets and larger standard deductions. [14] There are many special rules and exceptions applicable to head of household filing status. [15]
The head of household filing status was created in 1951 to acknowledge the additional financial burdens faced by single people caring for dependents. [ 3 ] [ 1 ] Consequently, it provides single parents and other people caring for qualifying dependents with a larger standard deduction and preferential tax rates compared to single filers ...
Single individuals may be eligible for reduced tax rates if they are head of a household in which they live with a dependent. Taxable income is defined in a comprehensive manner in the Internal Revenue Code and tax regulations issued by the Department of Treasury and the Internal Revenue Service. [10]
How the IRS handles instances of two divorced parents claiming head of household status depends on the details. Specifically, it depends on which child each parent is claiming on their taxes.
An unmarried individual filing a tax return under single or head of household status can choose the deduction method that is most beneficial, but a married couple will be required to use the same deduction method in most cases (Title 26 U.S. Code §63(c)(6)(A)).