UNIFIED TAX RETURNS

What is the head of household filing status?

The head of household filing status permits parents or other adults who pay more than half of the cost of upkeep of a home for a qualified individual to a bigger standard deduction and lower tax rates than single taxpayers or those who are married but filing separately.

Can two individuals file as the head of household on their tax return?

Only one individual may claim to be the head of the household on the same return. In general, according to the IRS offer and compromise, if they are married, they must file as married, filing jointly on the same return or as married, filing separately on separate forms.

However, if both occupants of a shared dwelling meet the qualifying standards of the IRS offer and compromise, either one may assert that they are the head of the household.

  • You both must be unmarried.
  • Both of you must be able to identify a dependent as being closely related.
  • The dependent must reside at the same residence for more than half the year (or, if an older parent, they may live elsewhere as long as you have still given them at least half of the year’s support).
  • The cost of keeping the portion of the house set aside for them, and their dependents had to have been shared by more than half. 

Can you make a head-of-the-household claim without making a dependent claim?

You normally need to have a qualifying kid or dependent claimed on your return as a dependent on filing as the head of household. However, if the non-custodial parent meets the following requirements, and you are the custodial parent and cannot claim the child as a dependent, you may be eligible to file using the head of household filing status.

You are considered single or unmarried on the last day of the year.

Moreover, half of the help went to the parents of the child.

The youngster is in the care of one or both parents for more than half the year.

What benefits come with filing as the head of the household?

The head of household filing position has two primary benefits for you:

  • Greater taxable income results in lower tax rates and higher standard deductions.
  • If you file as the head of household rather than as a single person or a married person filing separately, your taxable income will typically be taxed at a lower rate.

Heads of households get a higher standard deduction or IRS tax relief than single or married taxpayers who file separately. The head of household’s standard deduction in 2021 will be $18,800. The IRS tax relief for single or married people filing separately is only $12,550.

What differences exist between the head of household status and other filing statuses?

The head of household filing status gives a larger standard deduction amount and lower tax brackets than single filers, while it is less favorable than married filing jointly.

Head-of-household filers may have a lower taxable income and a bigger possible refund than single filers. Compared to single taxpayers, the head of household position has a standard deduction of approximately 50% more ($18,800 vs $12,550). Heads of the household may also use larger tax brackets to shift more of their taxable income into lower tax categories.

Joint filers benefit from higher standard deduction amounts and wider tax rates but cannot file as the head of the household. The standard deduction for joint filers is $25,000, which is twice as much as the standard deduction for single taxpayers ($18,800 vs 25,100 for 2021).

How Do You Claim as the Head of Household?

To be eligible for the head of household position, you must meet several connected conditions from notice of federal tax lien, including your marital status, paying more than half of your household’s expenses, and having a dependant. 

  1. The unmarried test

A taxpayer must be single on the last day of the tax year to file as the head of household. Following a state court order shows that you are legally single, divorced, or separated. However, you can be “considered” to be divorced if you’re still legally married but have lived away from your spouse for at least the last six months of the year—exactly, from no later than July 1 through the end of December.

  1. The stability test

You must pay more than half of your home’s yearly maintenance expenditures to pass the support test. Examples of qualified costs include rent and mortgage interest payments, but not the principal balance of your mortgage installments. That part is making your debts repaid. They consist of property taxes, homeowner’s insurance, repairs, upkeep, and food.

  1. Determine whether a dependency qualifies

A qualifying dependent must reside in your home for more than half the year to qualify. This regulation’s intricacy may be the greatest of all. Only a limited number of close relatives can meet the requirements for head of household filing status.

How the head of the household status benefits?

Your tax bracket can be lower if you file as the head of the household rather than as a single individual or a couple filing separately.

Additionally, you are permitted to claim a bigger standard deduction when filing as the head of household than when filing as an individual, which frequently lowers your tax payment.

Single parents or those with qualifying dependents can keep more of their income with this filing status, which will help them pay the higher cost of maintaining a qualified person’s home.

You could need to satisfy several requirements depending on your state-level notice of federal tax lien.

If you need help determining your filing status, you may learn more by visiting the IRS website.

When and How Can Debt Collectors contact Debtors?

Debt collectors are prohibited from contacting debtors during inconvenient hours, according to the Fair Debt Collection Practices Act. 

In other words, unless the debtor and the collector have agreed to a call outside the allowed hours, they shouldn’t call before 8 a.m. or after 9 p.m. 
For example, if a debtor tells a collector they’d want to speak at 10 p.m. after work, the collector is permitted to call at that time. However, the debtor is not legally permitted to call at that moment without an invitation or agreement as followed in the Fair Debt Collection Practices Act.