Single taxpayers sometimes have the option to file as single or as head of household. You can save a lot of money if you qualify as head of household. Eligibility for tax credits and deductions are the same, but head of household filers receive a larger standard deduction and more generous tax brackets. Depending on your income, this could mean hundreds or even thousands of dollars in tax savings.
Standard Deduction Savings
The IRS allows taxpayers to claim a standard deduction which lowers taxable income. Single filers are allowed a standard deduction of $6,300 for the 2015 tax year, while head of household filers receives a $9,250 deduction. This means the taxable income of a head of household filer will automatically be $2,950 less than that of a single filer. At the 15 percent tax bracket, that $2,950 difference results in a $442 savings. In the 30 percent tax bracket, it's a savings of $885.
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Tax Bracket Savings
Head of household filers have higher income limits for each tax bracket compared to single filers. Exactly how much money you'll save as head of household depends on your taxable income, but you'll always pay the same tax rate or less than a single filer. As your taxable income increases, the tax savings also increase. For example, if your taxable income is $30,000, you would pay 10 percent on the first $9,225 and 15 percent on the remainder as a single filer. Your tax would be $923 -- or 10 percent of $9,225 -- plus $3,116, or $30,000 minus $9,225 multiplied by 15 percent. Your total tax is $4,039. If your taxable income is $30,000 and you're a head of household filer, you'll pay 10 percent tax on the first $13,150 and 15 percent on the rest. Your tax would be $132 -- 10 percent of $13,150 -- plus $2,528, or $30,000 minus $13,150 multiplied by 15 percent. Your total tax comes out to $2,660. You save an extra $1,379 by filing as head of household.