23 Dec What does filing ‘head of household’ mean for my tax return?
Photo: pixabay.comQ. What’s the advantage of filing “head of household” versus the other choices? Who qualifies and how do you decide if you should?
— Taxpayer
A. Filing as head of household, in some cases, could give you tax savings.
The tax rates are somewhat lower for both federal and New Jersey purposes as Head of Household, said Neil Becourtney, a certified public accountant and tax partner with CohnReznick in Holmdel.
He said you will also be entitled to claim a higher federal standard deduction as Head of Household compared with filing as single or married separate.
“To qualify as head of household, you must be unmarried on the last day of the year and have paid more than half the cost of keeping up a home for the entire year for a qualifying person — often a child — who lived with you in the home for more than half the year,” Becourtney said.
If the qualifying person is your dependent parent, he or she does not have to live with you, he said.
In tracking the costs of keeping up a home, include rent, mortgage interest, real estate taxes, homeowner’s insurance, repairs, utilities, and food, but don’t include clothing, education, medical treatment, vacations, or transportation. For more information on filing statuses, see IRS Publication 501.
The instructions to Form NJ-1040 state that “in general, you must use the same filing status as you do for federal purposes,” and that you can file as head of household if you meet the requirements to do so for federal purposes, Becourtney said.
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This story was originally published on Dec. 23, 2019.
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