Individuals filing the 1040 individual tax return must choose a filing status based on the composition of their tax household. Unmarried taxpayers who have dependents may elect to file their taxes under the outlines for the head of household meaning.
The head of household filing status covers the specific conditions for a tax household that includes at least one dependent. The IRS provides guidelines for taxpayer filing statuses that are followed by state return filing statuses, such as for Missouri taxes. There is no such thing as filing as head of household without dependents.
What's a Filing Status?
Missouri requires that taxpayers use the same filing status as selected on the federal 1040 return. This means that if a taxpayer selects head of household (or HOH filing status) as their federal filing status, that taxpayer must also file as head of household in Missouri.
There are five basic filing statuses for individual taxpayers, as outlined by the IRS. These include married filing jointly, married filing separately, single, qualifying widow/er and head of household. The criteria for each status is defined by the IRS and is largely related to marital status and the composition of a tax household.
A tax household is essentially composed of the Social Security numbers that appear on a single tax return. For example, the tax household for a single filer would only include the individual filing the return. A taxpayer filing under married filing jointly would have a tax household consisting of a married couple and possibly dependents.
The primary difference between the tax filing single versus head of household is the presence of at least one dependent. There is no option to file head of household without dependents.
Who Qualifies as Head of Household 2021?
Head of household requirements in 2021 allow for certain unmarried taxpayers to elect this status. The IRS is rather strict in regards to who may qualify for this filing status. First, a taxpayer must be considered unmarried by the last day of a tax year. Next, the taxpayer must provide over half of the income for a household which includes a qualifying dependent.
The primary benefit of filing under the head of household status is a higher standard deduction than what is available for a single filer. For the 2021 tax year, the IRS has set the head of household 2021 standard deduction as $18,800. The standard deduction for a single filer would be $12,550. A higher standard deduction reduces the overall taxable income, thus reducing the amount of taxes owed.
The critical component of filing under the head of household filing status is the presence of at least one dependent who is eligible to be claimed. The IRS maintains that dependents must also pass qualifying tests. For example, in most cases, married individuals cannot be claimed as dependents.
Who Qualifies as a Dependent?
A major component of eligibility for the head of household filing status is the presence of a qualifying dependent who is a U.S. citizen. Dependents can either be qualifying children or qualifying relatives.
A qualifying child is one that is under the care or guardianship of the claimant taxpayer. There are five parts to the IRS test for assessing a qualifying child. Briefly, the test includes assessing the relationship to the child, the child's age, residency, financial support provided by the claimant and whether another taxpayer can claim the child.
Qualifying relatives are dependents who are not eligible to be qualifying children. The rest of the test for a qualifying relative includes assessing the relationship or household requirement, gross income and the amount of support provided by the claimant taxpayer.
While there are similarities between qualifying children and qualifying relatives, there are some very key differences. Qualifying children make a taxpayer eligible for the Child Tax Credit, which may be refundable. Qualifying relatives enable eligibility for the nonrefundable Other Dependent Credit.
Hashaw Elkins is a financial services and tax professional, as well as a project management consultant. She has led projects across multiple industries and sectors, ranging from the Fortune Global 500 to international nongovernmental organizations. Hashaw holds an MBA in Real Estate and an MSci in Project Management. She is further certified in organizational change management, diversity management, and cross-cultural mediation.