The IRS has six official filing statuses--one of those is the head of household status. If you've had any recent life changes, like a divorce or separation, you should always investigate all six statuses to find out which one best fits your situation. Consult a professional tax preparer or adviser before you make the final decision on which status to select on your taxes.
What Is Head of Household?
As the name suggests, a head of household is someone who supports and leads the home. This person pays most of the costs of the home (more than half), like rent and living expenses, and is commonly unmarried with other people in the home to support. You need to have at least one qualifying person (living with you for over half the tax year)--usually a child or a dependent parent--if you're thinking about selecting head of household status.
The head of household status affords a tax filer a number of benefits. For one, the tax rate is lower compared to filing as a single person. You also get a better standard deduction, which reduces your taxable income. People who claim head of household can also claim significant credits, like the child tax credit and the earned income credit. In many cases this status applies to an unmarried person, but there are exceptions to the rule.
IRS regulations state that someone who is legally married can use head of household status if she is "considered unmarried." If you're thinking about going this route, it's important that you gain an understanding of exactly what that means. You must meet five tests for head of household status if you're still married. For one, you must file a separate return from the spouse. You also have to pay more than half the household costs during the tax year. If you did not live with your spouse during the past six months of the year you pass another of the tests. Finally, your home has to be the main dwelling of the child or other dependent you plan to claim and you must be eligible to claim an exemption for each child.
Another situation applies where you can claim head of household status as a married person. If the spouse is a non-resident alien you can select this status. But keep in mind that you cannot claim the non-resident alien spouse as a qualifying person on your taxes in this case--you must have another qualifying person, such as a child, to use head of household status. Also, keep in mind that you cannot get the earned income credit if you choose this method for a non-resident spouse unless you meet the five tests discussed earlier under "Considered Unmarried."