The Head of Household tax filing status lowers the tax rate of unmarried individuals with dependents. The dependents could be their under-age children, adult children with disabilities, or elder parents. Twenty-two million Americans used the Head of Household status in 2014.
According to the IRS, “If you qualify to file as head of household, your tax rate usually will be lower than the rates for single or married filing separately. You will also receive a higher standard deduction than if you file as single or married filing separately.”
Donald Trump’s proposed tax plan ELIMINATES the Head of Household option. Under the Trump plan, that person will have to file as a “single” tax status and use its higher tax rate. For example, using the 2017 Tax Tables the Head of Household filer with an adjusted income of $50,000 would be taxed at the 15% rate, or paying $7500 in taxes. The same taxpayer using the Single status would be taxed at 25%, or pay $12,500 in taxes. That’s a $5000 benefit for the Head of Household filer, which would be lost under Trump’s proposed plan.
The following articles used other scenarios to explain the Head of Household situation:
- Would 51% of Single Parents See Taxes Raise in Trump’s Tax Plan? (Politifact)
- Trump would hike taxes on some in middle class (USA Today)
- Tax plan penalizes single parents (ThinkProgress)
Just an interesting note: According to the 2010 census, there are 2.6 times more unmarried females than unmarried males in the United States who have their dependent children live in their households. The census does not give gender information about adults with dependent parents.
Rep. Tom Reed is a member of the House of Representatives’ Ways and Means Committee, which makes recommendations to the House on all bills for raising revenue,
including taxation. According to Reed’s website, he feels that “The American people deserve a simple, fair tax code and we are committed to serious reforms.”
Ironically, last March Rep. Reed received a lot of positive press because he authored H.R. 4708, the Credit for Caring Act of 2016, which amends “the Internal Revenue Code of 1986 to provide a nonrefundable credit for working family caregivers.” He said in its Press Release “We care about those who become caregivers for their aging parents, grandparents or other relatives. These families are making enormous sacrifices and are struggling to make ends meet. The expense of providing personal, at-home care can add up quickly. It’s only fair that we support our caregivers.”
We also must remember that Rep. Reed was raised by his widowed mother who probably filed as the Head of Household and was grateful the benefits that status provided.
The chart below shows that over 38,000 (11%) of Rep. Reed’s constituents used the Head-of Household filing status in 2014.
Does Rep. Reed still care for and support caregivers for their “enormous sacrifices”? Will he identify with the financial and emotional needs of single parent families? Does he realize the negative economic impact on our District’s businesses that having 38,000+ single parent families pay more Federal taxes?
Will he fight for the people of our district and support a change in the proposed tax plan, or will he fall in line with the GOP leaders to appease the new President?
Trump’s tax plan alters the tax brackets, increases the standard deductions, eliminated personal exemptions, increases child care breaks, lower business taxes and eliminates estate taxes (Has anyone ever personally known someone who has paid the estate tax?). The article “Will my taxes go up or down under President Donald Trump?” compares the present tax law to Trump’s proposal.