Friday, May 5, 2017

Trump's Tax Plan - Part 2

Some people are saying Trump's tax plan will eliminate the "Head of Household" filing status. Some say it won't.

In general, I don't think "Head of Household" is the best term to use. That phrase has implications which have nothing to do with taxes. A lot of people think "head of household" means "who makes the rules in the house" or "who makes more money". Nope! Neither of those definitions have anything to do with whether or not you're a Head of Household.

So there are a lot of people who falsely claim to be "head of household", simply because the term doesn't mean what they think it means. For tax purposes, "head of household" is more like "single parent". It's for someone who's single and who paid over half the expenses for a qualifying person that lived with them. At least, that's the general idea. The rules are way more complicated than that. It's the most complicated of the five filing statuses, for sure.

The most common abuse of Head of Household status is a married person claiming Head of Household, or a single person claiming a child that never lived with them. I personally would want to keep this filing status, because it's good for us as a society to support single parents. However, I would try to do something to cut down on potential abuse.

1 comment:

Anonymous said...

What surprises you most about being a parent?
What surprised you most about Rosie?
What brings you the most joy about Rosie?
What is the most difficult part?