I am single, and I have always wondered why I could not file my taxes as “head of household.” After all, I live alone, and I am the “head of my household.”
“Head of household” is a special filing status that’s given to single taxpayers who are caring for other people. Congress realizes that it’s often tough for single parents to make ends meet. So, for many years, single parents have gotten more generous tax brackets and a larger standard deduction. Head of household status also applies to those who are supporting a parent. If you are single, and qualify as a head of household, you definitely should file as head of household.
The term “head of household” is probably an unfortunate choice of words. According to the dictionary definition of the words, yes, a single person living alone is the head of the household. But the definition in the tax code is what counts.
Tax law, like so many areas of the law, often defines terms very precisely and sometimes those definitions aren’t the same as what the ordinary meaning of the words would lead you to believe. If the tax code defines a word or phrase (such as head of household), the special definition applies and it overrides the common meaning.
Section 2(b) of the Internal Revenue Code clearly defines head of household as a single person who lives for at least half the year with a single, dependent child or a dependent parent. (There are a number of technical provisions to explain special situations.) There are also elaborate definitions in the tax code as to what is a qualifying dependent child or a qualifying dependent individual. It’s quite clear though, that you must have a dependent to file as a head of household.
The tax code has been using the term “head of household” for over half a century. Although the definition has become more technical, the meaning hasn’t changed very much. So I doubt Congress will replace “head of household” with a more descriptive label anytime soon.
In answering this question, I wondered when Congress started giving breaks to single parents.
In 1954, the tax code was substantially overhauled, and three separate sets of tax brackets were established for heads of households, single, and married taxpayers. This was the first time the tax code used the words “head of household.” Tax brackets for married taxpayers were more generous than those for single taxpayers, with head of household in between.
Before that, the 1939 code had taxpayers paying both income tax and a second income tax called “surtax.” The rates were strictly based on income, regardless of whether you were married or had a family.
Times were different. It was assumed that there was only one breadwinner in each household. Two-income households were unusual. The tax code was structured accordingly.
But even before the separate schedules of tax brackets for single and married taxpayers, Congress realized that a taxpayer who had a family to support needed a tax break.
The break Congress gave back then was to increase what is now the standard deduction for married taxpayers. Interestingly, those who were not married, but the “head of a family” got the same standard deduction as a married taxpayer. (In 2011, the standard deduction for a married couple was $11,600, but a head of household only got $8,500.)
There was also a primitive version of the earned income credit, which applied to everyone’s wages, regardless of income. Finally, there was a $400 personal deduction for the taxpayer, spouse, and each dependent. (That deduction in 2011 was $3,700.)
One of the drawbacks applying the income tax to a family unit is the constant tension between trying to help struggling families and the realization that a married couple can often live more inexpensively than two single people. Over the years, Congress has recognized the issue and tinkered with the balance repeatedly. There really is no easy answer, and changing family dynamics have made getting it right even more complicated.
