Important difference between single and head of household on your tax return and why it’s crucial to get it right

Tax filing season is upon us, and the difference between reporting single and head of household on your tax return could make a big difference.

Filers can check the single filing status box if they are unmarried.

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It is important to know the difference between a single status and a status of head of household when declaring taxesCredit: Getty
While declaring the head of household on a tax return, there are eligibility requirements

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While declaring the head of household on a tax return, there are eligibility requirementsCredit: Getty

If the filer supports a dependent financially, they can claim head of household status, which can mean significant tax benefits, CNBC reported.

It is preferable to declare oneself head of household for divorced parents because of the wider tax brackets.

Single filers can hit the top 12% with $40,525, while heads of households can have up to $54,200.

With a larger standard deduction, taxable income may be lower.

Filers may also qualify for other write-offs, such as third stimulus payments, child tax credit, or earned tax credit for 2021.

While claiming head of household, there are eligibility requirements.

The person must be single or living separately from their spouse for at least six months of the year.

A temporary absence for studies or work does not count.

More than half the cost of maintaining a home – rent, mortgage interest, property taxes, utility repairs and meals – must be paid.

The filer must also have an “eligible person”, such as a child, grandchild or other relative, living with them for more than half the year, although a dependent relative may reside in a another home as long as the declarant covers more than half of their living expenses.

Both parents are eligible to be head of household with two or more children as long as one child lives with each parent for more than half the year, providing more than half of their financial support, CNBC reported.

If there is only one child, the parents can change their head of household status each year.

Filers may be eligible for write-offs, such as third stimulus payments, child tax credit, or earned tax credit for 2021

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Filers may be eligible for write-offs, such as third stimulus payments, child tax credit, or earned tax credit for 2021Credit: Getty

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