If you're starting to get your tax forms ready and are taking a look at all of your options, one aspect of taxes for you to consider is what your filing status is going to be, which could be single, married filing jointly, or head of household, the latter of which is oftentimes misunderstood by individuals who are filling out their annual tax forms. The head of household filing status can bring with it a variety of benefits that could apply to you.
What Is a Head of Household Filing Status?
Head of household is a type of filing status that's used for unmarried or single taxpayers who maintain a house for a qualifying person, which is typically referred to as a dependent. Anyone who qualifies for this type of filing status will be able to receive a higher deduction and a lower overall tax rate than individuals who use the single filing status.
How Do You Qualify as Head of Household?
You need to meet three filing status requirements in order to properly qualify for the head of household filing status. First, you must not be married on the final day of the tax year. You must also pay for over 50 percent of the total costs pertaining to keeping up a home for the entire tax year, which includes costs such as mortgage payments, rent payments, utilities, and property taxes. The third and final requirement is that a qualifying person must live with you in your home for at least half of the year.
What Is a Qualifying Person?
When you're trying to determine whether you qualify for head of household filing status, a qualifying person refers to a child, parent, or relative who lives with you but pays less than half of what it takes to maintain a household. If you're having issues with understanding every facet of your tax forms, you may be able to avoid making a mistake by retaining the services of a tax accountant in Las Vegas.