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80 Taxes 43 (2002)
The Head of Household Status as a Tax Boon

handle is hein.journals/taxtm80 and id is 43 raw text is: TAXES/JANUARY 2002 THE HEAD OF HOUSEHOLD STATUS AS A TAx BOON WALLACE HOFFMAN EXAMINES THE FEDERAL INCOME TAX IMPLICATIONS WHEN INDIVIDUALS FILE AS HEADS OF HOUSEHOLD. BY WALLACE E. HOFFMAN people who paid over half the cost of keeping up a home for a quali- fying person, such as a child or parent.2 One key element is that in order to qualify for head of household status, a taxpayer must not be married or a surviving spouse at the close of the tax year.3 In addition, the head of household must furnish (with funds the source of which are at- tributable to the taxpayer) more than one-half the cost of maintain- ing the home during the tax year.4 The head of household status was added to the Internal Revenue Code (the Code) in 1952 with three qualifications:' 1. Were you unmarried (or legally separated) at the close of your taxable year? 2. Did any person for whom you are entitled to an exemption, or your unmarried child, grand- child, or stepchild, even though not a dependent, share during your entire taxable year your home which was your principal residence? 3. Did you furnish more than one half of the cost of maintaining Wallace E. Hoffman, Ph.D., M.Ed., is employed by the Biloxi Public School System, Biloxi, Mississippi. The head of household status for fed- eral income tax provides a large tax boon that increases in magnitude each year. For a majority of taxpayers, two individuals who qualify as heads of household pay less than 75 percent as much federal income tax as a mar- ried couple with the same income. If one person qualifies as head of house- hold and another person files single, their combined federal income tax is still less than 75 percent as much as the tax liability of a married couple with the same income. The Marriage Penalty The marriage penalty has been pub- licized in recent years, as shown by an article published in TAXEs-THE TAx MAGAZINE.' This article exam- ines the history of the federal income tax penalty for married couples and offers two recommen- dations for eliminating this inequity. The marriage penalty is further increased when the head of household status is used in filing federal income tax returns. Definition of Head of Household Status The IRS defines head of household as the status for unmarried ©2001 W.E. Hoffman

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