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What are Household Expenses?

By Bethany Keene
Updated May 16, 2024
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Household expenses refer to the cost of maintaining a home, such as paying the rent or the mortgage, utility bills, and groceries for the people living in the house. Many individuals and families choose to create a budget to help maintain expenses for the house, and to view how much money enters and leaves the house every month. In addition, household expenses may also be used when determining tax filing status, if one is eligible to file as the head of household.

Filing as a head of household, rather than filing as single, will entitle one to a lower tax rate and a higher standard deduction. There are a number of requirements that must be met before one is able to file as head of household, including at least one other qualifying person in the house. One of the other significant requirements, however, is that one must pay more than half of all household expenses in order to qualify as head of household. The expenses include mortgage or rent, as well as property insurance, utilities, repairs to the home, and food consumed in the home, among others; there are worksheets available for free to help one determine what qualifies as household expenses.

Certain expenses are not covered under the household expenses category for tax purposes, but that does not mean they should not be included when trying to develop a budget. This can include items such as personal care or clothing items for people in the home, medical costs, education costs, travel or vacations, money spent caring for pets, personal insurance such as life insurance, or costs of transportation. This can include buying and maintaining a vehicle and paying for insurance on it, or paying for public transportation.

Chances are, a household will have a number of miscellaneous expenses as well. This can include buying items for the home such as decor, or going out for entertainment purposes such as to the movies or out to a restaurant. Any money that is put into a savings account or a retirement plan could potentially be considered part of household expenses as well. When trying to develop a budget for the household, it may be helpful to go through all the money spent for a few months to find other, unexpected expenses; simply go through credit card statements or checkbooks, and begin keeping track of all the money spent. Soon, areas where cutbacks can be made may become clear.

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Discussion Comments
By bear78 — On Jun 08, 2013

When I'm budgeting household expenses, I include everything I cannot live without. So food, personal care items, electricity, water, heating, telephone and cable and medical bills all go in there.

If after calculating all of these, I have money left over, I use it for entertainment or to buy something for the house.

By discographer — On Jun 07, 2013

literally45-- That's a very good question. I'm not a tax expert but I think when it come to the IRS and other official agencies, telephone and internet bill is considered a personal expense unless you own your own business and use the telephone and internet for your business.

The best thing to do is to ask your loan giver if you can include this in your household expense. Different people have different rules about this so it's best to ask.

When I'm calculating my monthly expenses, I include all this but I have not included it in my individual tax return as a deduction.

By literally45 — On Jun 07, 2013

I have to report my monthly household expenses to get a forbearance on a loan. Can I include my monthly cell phone bill and internet charge in utilities?

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