Head of Household Qualifications and Dependents
If you can qualify as head of household, you'll pay taxes on $2,750 less in income in the 2012 tax year, the difference between the $8,700 head of household standard deduction and the $5,950 deduction for single filers or married individuals filing separately. Qualifying isn't easy, however, and you can't do it unless you have at least one dependent.
Only unmarried individuals can qualify for head of household filing status. Either your divorce must be final by Dec. 31, or your spouse must have moved out of your home no later than June 30 of the tax year for which you are filing. In the latter case, the IRS would still allow you to file a joint married return, but you can't be head of household. If you file a joint married return, the standard deduction is the same for each of you as it would be if you filed separate married returns: $11,900, or $5,950 each.
In addition to meeting marriage requirements, you must have paid more than 50 percent of the costs of maintaining your home during the tax year. Qualifying expenses include your mortgage interest or rent, repairs, utilities and groceries. You can't count the principal part of your mortgage, because that's a loan you're repaying, but you can include your homeowners insurance and real estate taxes.
You can't qualify for head of household status if you don't have any dependents. Your most obvious dependents are your children. A qualifying child must not yet have reached his 19th birthday as of Dec. 31 of the tax year, unless he's a full-time student. Student status extends the age limit to 24. Your child can't have provided more than half his own support during the tax year, and he must have lived with you for six months or more. He is considered as living with you even if he's away at school. Your child does not necessarily have to be your biological offspring. He can be your grandchild, a foster child, a stepchild or a sibling. If your dependent is your sibling or unrelated to you, he must be younger than you, unless he's disabled.
Certain adults may be your dependents as well. A qualifying adult must also live in your home for more than half the year, but parents are exempt from this rule. For example, if you're supporting your mother in a nursing home or even in her own home, she's still your dependent if she meets all other criteria and if you provided more than half of her support. Adult dependents must have earned less than the amount of the IRS dependent deduction in that tax year -- $3,800 in 2012. Unrelated people who live with you, such as your housekeeper, usually don't qualify, particularly if you pay them.
You must claim your dependents on your tax return to qualify as head of household, with one exception. If you're divorced, and your spouse can claim the dependent deduction for your child under the IRS tiebreaker rules for divorced parents or because your divorce decree allows her to claim your child in certain years, you can still file as head of household if you meet all the other criteria. That is, you can't be anyone else's qualifying dependent, your dependents can't file joint returns with anyone else unless it's just to receive a refund and they can't qualify as anyone else's dependent, with the exception of your ex-spouse. If your dependent files a tax return, he can't claim a standard deduction for himself.
Beverly Bird has been writing professionally for over 30 years. She specializes in personal finance and w, bankruptcy, and she writes as the tax expert for The Balance.