What It Means, Word Origin, and Examples

What Is a Breadwinner?

A breadwinner is a colloquial time period for the first or sole revenue earner in a family. Breadwinners, by contributing the most important portion of family revenue, usually cowl most family bills and financially help their dependents.

Key Takeaways

  • A breadwinner is an individual in a family who brings within the lion’s share of revenue and thus helps the household financially.
  • Prior to now, the breadwinner referred primarily to a single-income household the place the opposite partner remained at dwelling.
  • In the present day, breadwinners will be girls or males, or each collectively.
  • Relying on how revenue is produced, taxes levied on the breadwinner(s) can differ.

Understanding a Breadwinner

The time period breadwinner is typically used to seek advice from single-income households by which one of many members works to generate revenue and the opposite stays at dwelling to look after dependents. In different conditions, a family could also be a dual-income family however have just one breadwinner.

In dual-income households, the breadwinner is the one with the extra worthwhile and economically sound job. The opposite revenue earner, who could also be working part-time or can afford to depart the workforce, is just “incomes,” however not essentially a breadwinner.

Breadwinner as Head of Family

For tax functions, a breadwinner could file their taxes as head of family. The Inside Income Service (IRS) defines a head of family as a single or single taxpayer who pays no less than 50% of the prices of supporting a family and gives help to different qualifying members of the family residing beneath the identical roof for greater than half of the yr.

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Which means the breadwinner should have paid greater than half of the overall family payments, together with hire or mortgage, utility payments, insurance coverage, property taxes, groceries, and repairs. Some examples of qualifying members of the family embody a dependent youngster, grandchild, brother, sister, grandparent, or anybody else you’ll be able to declare as an exemption.

Heads of households profit from a decrease tax charge. As an example, in 2022, the 12% tax bracket applies to single filers with an adjusted gross revenue (AGI) of between $10,275 and $41,775 for the tax yr (growing to $11,000 and $44,725 in 2023). In the meantime, the 12% tax bracket for heads of households applies to AGI between $14,650 and $55,900 (growing to $15,700 and $59,850 in 2023). In different phrases, a person that earns $50,000 pays 12% revenue tax as a head of family and 22% if submitting as a single particular person.

For 2022, the pinnacle of family customary deduction is $19,400 (growing to $20,800 in 2023), which is considerably larger than the $12,950 (growing to $13,850 in 2023) customary deduction single filers and married people who file separate returns can declare. Married taxpayers who file joint returns get a $25,900 deduction (growing to $27,700 in 2023). This works out as a $12,950 deduction for every of them, nonetheless properly under the pinnacle of family quantity.

Married Breadwinner Submitting Collectively or Individually

Tax regulation was designed to learn married {couples} with one important breadwinner and one stay-at-home partner. If one partner isn’t working or was beginning a enterprise and had losses, the couple will profit when submitting collectively.

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A married taxpayer who’s the breadwinner of the family could select to file taxes collectively with their partner, somewhat than individually, to cut back the tax legal responsibility. Breadwinners could discover that they’re in a better tax bracket in the event that they file taxes individually—the upper the tax bracket, the upper the tax invoice.

As you’ll be able to see within the desk under, a breadwinner who earns $78,000 in annual revenue and information collectively with a stay-at-home partner will land within the 12% tax bracket. Ought to, nonetheless, the identical breadwinner select to file individually, the utmost tax charge utilized to this revenue could be 22% as an alternative.

2022 Tax Brackets
 Tax Price  Married Submitting Collectively  Married Submitting Individually
  10% $0 – $20,550 $0 – $10,275
  12% $20,551 – $83,550 $10,276 – $41,775
  22% $83,551 – $178,150 $41,776 – $89,075
  24% $178,151 – $340,100 $89,076 – $170,050
  32% $340,101 – $431,900 $170,051 – $215,950
  35% $431,901 – $647,850 $215,951 – $539,900
  37% $647,851 + $539,901 +
Supply: Inside Income Service

There are occasions when submitting individually from a partner makes essentially the most sense, resembling when one individual has costly prices associated to deductions primarily based on AGI. As an example, medical bills can solely be deducted in the event that they exceed 7.5% of your AGI. If a partner has excessive medical payments, the joint revenue could also be excessive sufficient that the breadwinner is unable to benefit from that deduction. In such instances, submitting individually is likely to be acceptable.

Why Is It Known as a “Breadwinner”?

The time period is believed to have originated within the U.Okay. within the 1820s. On the time, and even in the present day, bread is taken into account a staple meals merchandise. As such, the one who introduced dwelling the majority of the cash for a household, subsequently, was bringing dwelling the bread, so to talk.

What Is a Head of Family?

Head of family is a qualifier designated by the Inside Income Service that refers to a person in a house that’s single or single, pays 50% or extra of bills, and has dependents. A head of family pays decrease taxes than a daily single filer and has larger customary deductions.

What Is a Qualifying Dependent for Head of Family?

A qualifying dependent for a head of family is most frequently a baby. This generally is a organic youngster or step-child, nonetheless, it doesn’t solely need to be a baby. It may be a sibling, step-sibling, a niece or nephew, and generally anybody that’s depending on you.