Posted in Finance, Accounting and Economics Terms, Total Reads: 716
Definition: Household Expenses
Household expenses mean the cost of maintaining the home. It includes the costs such as groceries, paying the mortgage or the rent and utility bills for the people living in that house. Most of the families make a budget to maintain the expenses for the house. It helps them keeping a track of how much money is entering and how much is going out the house in each month. Also these expenses can be used for determining the tax filing status for the head of the household.
Filing as the head of a family, instead of filing as a single, entitles you to a higher standard deduction as well as the lower tax rates. There are a number of requirements to be met to be able to file as a head of a household which includes at least one, another qualifying person at the home. Also you must pay the more than 50% of the total household expenses. These expenses include the rent, utilities, property insurance, food consumed at the home; repairs in the home, etc. free worksheets are available to help you in determining what qualifies as the household expenses.
Some expenses are not included under this category for the tax purposes. But they should be included while developing a budget. This includes personal care, clothing, education costs, medical costs, travelling expenses, money spent caring for pets, vacations, personal insurance such as life insurance, or the costs of transportation. It also includes purchase & maintenance of a vehicle and insurance payment for it.
Generally, a household has the number of miscellaneous expenses. It includes buying things for home such as décor, going out for entertainment such as movies or going in a restaurant. Money put into a retirement plan or a savings account can also be considered as household expenses. While developing a budget for the household, one should go through the money spent for a few months. It can help the person to find out some unexpected expenses. Simply follow the credit card statement or a checkbook. By doing this, one can keep a track of all the money spent and the areas of cutbacks will become clear.