Itemizing Deductions

• Head of household filers who are eligible to itemize their deductions are generally able to claim a total deduction that is greater than the standard deduction. You are eligible to itemize when your potentially eligible expenses for the year in total exceed the standard deduction amount for your filing status. To make this determination, it's helpful to reference the instruction to the Schedule A attachment of your federal tax return. It includes all types of expenses that are includable in itemized deductions. Common deductible expenses include mortgage interest and property taxes you pay on your home, charitable contributions, medical and dental expenses, unreimbursed work-related expenses and many others.
  
  

Standard Deduction

• If you determine that you do not have sufficient expenses to itemize, the IRS allows you to claim a standard deduction instead. Each year, the federal government predetermines the standard deduction amount for each filing status. The standard deduction does not relate to any specific expenses you have; rather, you can think of it as the government's estimate of what the average taxpayer's expenses are. In 2010 for example, head of household filers can claim an $8,400 standard deduction, whereas single filers can only claim $5,700. This means that in order to itemize in 2010, your expenses must exceed $8,400.
  
  

Head of Household

• To file as head of household, you must be unmarried on the last day of the tax year, which is usually Dec. 31. Additionally, you must provide at least half the costs of maintaining a home and satisfy the requirements to claim at least one dependent who resides with you on your tax return. However, a dependent parent who does not live with you is the only exception to this rule.
  
  

Dependent Taxpayers

• The IRS imposes certain requirements you must satisfy to claim a dependent. Commonly, taxpayers claim their children as dependents. To do so, your child must be under age 19 or under age 24 if he is a full-time student. Your child must also live with you for more than half the year and he must not provide more than half of his own financial support. Other family members and relatives of any age can also be your dependent if you satisfy similar requirements. When claiming a dependent, you can take an exemption for each one which essentially reduces your taxable income in the same way your itemized deductions do.