What is the tax impact of filing as 'Head of Household'?

Filing as 'Head of Household' generally provides lower tax rates and higher deductions compared to filing as single. This filing status is designed to benefit individuals who are providing a home for a qualifying person, such as a child or other dependent.

The tax brackets for 'Head of Household' filers are more favorable than those for single filers, meaning that the same amount of income may be taxed at lower rates. Additionally, 'Head of Household' filers benefit from a higher standard deduction, which reduces taxable income further. This combination of lower tax rates and higher deductions can significantly decrease the overall tax liability, making it an advantageous option for eligible taxpayers.

While filing as 'Head of Household' can also open up opportunities for additional tax credits, the primary benefit lies in the reduced tax burden through lower tax brackets and higher standard deductions.