Charlotte (53) is unmarried and pays 75% of the cost of maintaining a home for her father, Arlo (79), who had no taxable income and did not live with Charlotte. Arlo is Charlotte's qualifying relative dependent, and she will claim him on her tax return in 2023. What is Charlotte's correct and most favorable filing status for 2023?

Answer 1

In 2023, Charlotte's most favorable filing status would be "Head of Household."

To qualify for this status, she must meet the following criteria:

1. Unmarried Status: Charlotte is unmarried.
2. Dependent: She has a qualifying relative dependent, which is her father, Arlo. Although he did not live with her, the fact that she provides more than half of his maintenance costs meets the requirement.
3. Home Maintenance: Charlotte pays for more than half the costs of maintaining a home for herself and her father, which means she can claim him as a dependent.

Being able to file as Head of Household allows her to take advantage of a higher standard deduction and potentially lower tax rates compared to the single filing status. Therefore, Charlotte should file as Head of Household for the 2023 tax year.