It stands to reason that if you're the head of the family, you're head of household, but the Internal Revenue Service doesn't see it this way. One of the cardinal rules to qualify as head of household is that you can't be married. The IRS definition of married isn't exactly literal, however.
According to the IRS, you must be "considered unmarried" to qualify as head of household, but this only means you and your spouse moved into separate households by July 1 of the tax year. You don't actually have to be divorced. Alternatively, you could live together past July 1 if your divorce was final before December 31. In other words, if you're divorced by the last day of the year, you're considered unmarried for the whole year. But if you're not legally divorced or separated by decree before that date, you can only be head of household if you and your spouse did not live together the last six months of the year.
Other Head of Household Rules
Your marital status alone doesn't determine whether you can file your tax return as head of household. You must also have a dependent. This might be your child who lives with you more than half the year, or even another relative you support. The rules for dependents are complicated, so if you think you qualify, speak with a tax professional to be sure. You must also pay more than half your household expenses for the year.
If you do qualify as head of household, it's probably going to save you a bit of money. For example, if you choose not to itemize, the standard deduction for taxpayers who file as HOH is $2,850 more than for those who a separate married return: $8,950 versus $6,100. If you're married and can't file as head of household, you don't have the option of claiming single status, and even if you did, it wouldn't help. The standard deduction for single taxpayers is also $6,100.
Another tax perk for head of household filers concerns tax brackets. They're more generous for those who can file as head of household. For example, if your taxable income is $90,000, you’d fall in a 25 percent tax bracket as head of household as of 2013. If you were to file a separate married return with that income, you'd be in the 28 percent bracket. If you and your spouse earned $90,000 together, combining both your incomes, you'd still be in a 25 percent tax bracket, but if your joint incomes topped $146,400, you'd move into a higher tax bracket.
Earned Income Credit
The earned income tax credit is available to single filers, heads of household, and married taxpayers. The amount of the credit depends more on your income and the number of dependents you have than on your filing status. Even so, heads of household get a bit of a break over married taxpayers. If you have one child, you're eligible for the EIC as head of household if you earn up to $37,870 in 2013. If you file a joint married return, however, the income cap is $43,210 – and that combines both your incomes.
Beverly Bird has been writing professionally for over 30 years. She is also a paralegal, specializing in areas of personal finance, bankruptcy and estate law. She writes as the tax expert for The Balance.