Single and head of household filers are both unmarried and both have dependents, but they receive very different tax treatment. If you meet the criteria for head of household, you'll enjoy better tax benefits compared to single filers. Mark box 4, Head of Household, on your Form 1040 instead of box 1, Single to claim head of household status if you qualify.
Qualifying as Head of Household
An unmarried taxpayer must file as single unless they can qualify for another tax status such as head of household. To qualify as head of household, you must meet all of the following criteria:
- You're unmarried as of the last day of the tax year. If you're separated but not divorced yet, you and your spouse must have lived apart the last six months of the tax year.
- You pay more than half the cost of maintaining your home.
- A qualifying person - like a dependent child or relative - lived with you for more than half of the year. If the qualifying person is a dependent parent, she doesn't have to live with you, but you must pay for at least half the costs of maintaining her home for the year.
Single filers and head of household filers have different tax brackets. Overall, the taxable income of head of household filers is taxed at more favorable rates compared to single filers. For example, in 2015, single filers will pay 10 percent on the first $9,225 of income earned, whereas head of household filers pay 10 percent on income up to $13,150. Single filers pay 15 percent on income between $9,225 and $37,450, whereas head of household pays 15 percent on income from $13,150 to $50,200. This means that if a single filer and a head of household filer have the same taxable income, the head of household filer will usually pay less in taxes compared to the single filer.
The Standard Deduction
Head of household filers also enjoy a higher standard deduction compared to single filers. For 2015, the standard deduction is $6,300 for single filers and $9,250 for heads of household. The standard deduction decreases taxable income, so a higher standard deduction means a lower tax liability overall.
Other than tax brackets and the standard deduction, single and head of household filers don't experience different tax treatment. The same income limits apply to head of household and single filers who want to take common deductions and credits. Single and head of household filers have the same adjusted gross income limitations for claiming the Earned Income Tax Credit and the Lifetime Learning Credit.