Why is Trump's tax plan getting rid of HOH filing status? (daycare, funds)
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You're comparing the taxation of two households vs one. Apples to Oranges.
A more interesting discussion might be to compare the tax situation of an unmarried couple living together vs two singles. Or a single and a HOH living together. That would be an interesting comparison. Your scenario is just silly.
The point you seem to be missing is it shouldn't be apples to oranges, the taxation for maintaining a household for a dependent should be the same regardless of marital status.
The point you seem to be missing is it shouldn't be apples to oranges, the taxation for maintaining a household for a dependent should be the same regardless of marital status.
I completely agree. That is the whole purpose of the HOH status.
The HoH filing status needs to be eliminated. Not because "single mothers don't deserve it," but rather because it is bad tax policy. This is why. . .
Standard deduction for a single individual is $6,300. For someone filing as HoH, they get the $6,300 of a single taxpayer, plus $3,000 in "Bonus" deductions for maintaining a household for a dependent, for a total standard deduction of $9,300. Now here is where the bad policy comes in. Two single individuals, each maintaining a household for a dependent, gets the $9,300 standard deduction described above. Between the two of them, that is a total of $18,600 in standard deductions. However, if those two individuals get married, their standard deduction would only be $12,600 (double the single rate). By marrying, they lose $6,000 in "bonus" deductions, even though they are still maintaining a household for a dependent (the same as the single person filing as HoH).
It is very bad policy to tell a single person, "You will get an additional $3,000 of deductions because you maintain a household for a dependent" while a married couple, who also maintain a household for a dependent just like the person filing as HoH, doesn't get the additional $3,000 of deductions, when they are doing the exact same thing.
When a deduction is predicated upon a particular activity, in this case, maintaining a household for a dependent, that deduction needs to be available to all who engage in the particular activity. There is no sound policy reason for the $3,000 "bonus" deduction available for maintaining a household for a dependent to be available to an unmarried person, while not being available to a married person.
Quote:
Originally Posted by SaucyAussie
What are you talking about? Explain the scenario where one household gets more tax relief.
OK, well if you followed the rest of the conversation you would see that TaxPHD clarified his statement and was not talking about a single household. You cannot have 2 people in one household claim HOH.
You're comparing the taxation of two households vs one. Apples to Oranges. A more interesting discussion might be to compare the tax situation of an unmarried couple living together vs two singles. Or a single and a HOH living together. That would be an interesting comparison. Your scenario is just silly.
I think he is trying to redefine household as applying to only one family unit at the same address. As it stands, two families could share an address and still be considered separate households, it's perfectly legal and most people don't have an issue with it or consider it unfair.
An example; my son is a single dad, he and his son live with us while my son is establishing his own business. He can legally file head of household because he and his son are a 'family unit', they pay their own expenses, have their own area of the house to live in and are not dependent upon us. It seems that taxphd doesn't like it when that happens.
OK, well if you followed the rest of the conversation you would see that TaxPHD clarified his statement and was not talking about a single household. You cannot have 2 people in one household claim HOH.
No, that is not what he is saying, he is trying to point out to you that a single parent household gets a tax advantage that a 2 parent household does not. If the idea is to give a tax advantage to households with children, marital status should not matter....it's pretty simple and not sure why you don't understand the difference.
No, that is not what he is saying, he is trying to point out to you that a single parent household gets a tax advantage that a 2 parent household does not. If the idea is to give a tax advantage to households with children, marital status should not matter....it's pretty simple and not sure why you don't understand the difference.
Single parent household has a standard deduction of 9300. Married household has a standard deduction of 12600. Single parent also pays higher tax rates than married household.
Single parent household has a standard deduction of 9300. Married household has a standard deduction of 12600. Single parent also pays higher tax rates than married household.
Result: Single parent household pays more tax.
How is that a tax advantage?
This really shouldn't be that difficult for you to understand.
HoH std. deduction is 9,300, which is the std deduction for a single individual of 6,300 plus 3,000 "bonus" deduction for maintaining a household for a dependent.
Married filing joint std deduction is 12,600 - exactly double the standard deduction for a single person with no dependents (and this makes perfect sense - two people married get exactly double the std deduction of two individuals that aren't married). Now here is where the problem comes in. If the married couple is maintaining a household for a dependent, they should also get the 3,000 in "bonus" deductions that the single parent gets. But they don't.
I don't think I can make it any simpler for you.
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