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Who Qualifies Me for Head of Household on My Taxes?

Do you pay for more than half of the costs of keeping up your home?

Are you unmarried?

Do you have someone else living with you that you care for?

Well, you’re in luck! Congress decided you need a break. A tax break, that is! You may qualify for a beneficial filing status, called Head of Household.

But not so fast!

Just because you meet these criteria, does not mean that there are no more criteria that you must meet. 

For a person that lives with you to qualify you for the Head of Household filing status, they must be related to you in a way that is closer than a cousin is related to you.

For example, the person can be your parent, sibling, child, or a descendant of any of these. In-laws count also in this case. Even ex-in-laws! That’s right, if you divorce your spouse and are still taking care of one of their family members, you may still claim them as your qualifying person for the purposes of Head of Household filing status. 

Further, you can claim a person that meets these criteria for the Head of Household filing status, even if you cannot claim them as your dependent. There is a special spot on the Form 1040 that you can put this person’s name in case they do not show up elsewhere on the return as a dependent. 

Nonetheless, most dependents will qualify you for the Head of Household filing status.

However, if you can claim someone as a dependent that meets the Member of Household test, and that is the only reason they qualify as your dependent, then you may not use them as your qualifying person for the Head of Household status. 

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Thank you for reading. This article should not be regarded as legal advice. For information on your specific situation, please consult a local professional. 

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Is My Scholarship Taxable?

One of the benefits of being a good student in high school (or filling out many different forms from many different organizations and attempting to make up for not being a great student) is earning a scholarship and having some of your tuition and books paid for. 

 

What is a Scholarship?

 

For those unaware, a scholarship is generally awarded by an organization (usually a non-profit) to a student for outstanding grades, athletic ability, or some other attribute of the student. It is generally monetary and must be used toward school tuition or necessary supplies for classes.

 

Scholarships generally are tax-favored for those receiving them.

 

Great, so my Scholarship is Tax-Free?

 

Possibly. Obviously nothing is quite that black and white with taxes. For the portion of your scholarship that does not exceed your education expenses and does not represent wages that were earned for the scholarship, yes it is tax-free.

 

If the organization did not specify that your scholarship must be used for education expenses, part or all of the scholarship is generally going to be taxable.

 

If any of the scholarship represents wages that were earned, then the organization will report those wages on a Form W-2 and you must report this income on line 1 of Form 1040 (your personal income tax return).

 

Can I use my Scholarships toward education credits? 

 

When it comes to the tax education credits and benefits, you generally can’t double dip. If your tax-free scholarship covered some or all of your education expenses, you cannot use those same expenses toward the American Opportunity Tax Credit, Lifetime Learning credit, or any other credit or deduction.

 

However, if your scholarship is not tax-free, it generally would be wages or other earned income, meaning there is no tax advantage to them. Since they’re not already tax-advantaged, you can use the education expenses paid for by the scholarship to claim an education credit.

 


This article does not constitute legal, financial, or tax advice. For help retarding your situation, please consult your local tax advisor.