For tax purposes, December 31 means more than New Year’s Eve celebrations. It affects the filing status box that will be checked on your tax return for the year. When you file your return, you do so with one of five filing statuses, which depend in part on whether you are married or unmarried on December 31.
More than one filing status may apply, and you can use the one that saves the most tax. It also is possible that your status options could change during the year.
Here are the filing statuses and who can claim them:
- Single. This status is generally used if you are unmarried, divorced, or legally separated under a divorce or separate maintenance decree governed by state law.
- Married filing jointly. If you are married, you can file a joint tax return with your spouse. If your spouse passes away, you can generally file a joint return for that year.
- Married filing separately. As an alternative to filing jointly, married couples can choose to file separate tax returns. In some cases, this may result in less tax owed.
- Head of household. Certain unmarried taxpayers may qualify to use this status and potentially pay less tax. The special rules that apply are described below.
- Qualifying widow(er) with a dependent child. This may be used if your spouse died during one of the previous two years and you have a dependent child. Other conditions also apply.
Head of household status
Head of household status is generally more favorable than filing as a single taxpayer. To qualify, you must ‘maintain a household’ that, for more than half the year, is the principal home of a ‘qualifying child’ or other relative that you can claim as your dependent.
A ‘qualifying child’ is defined as someone who:
- Lives in your home for more than half the year
- Is your child, stepchild, foster child, sibling, stepsibling, or a descendant of any of these
- Is under 19 years old or a student under age 24
- Does not provide over half of his or her own support for the year
Different rules may apply if a child’s parents are divorced. Also, a child is not a ‘qualifying child’ if he or she is married and files jointly or is not a U.S. citizen or resident.
Maintaining a household
For head of household filing status, you are considered to maintain a household if you live in it for the tax year and pay more than half the cost of running it. This includes property taxes, mortgage interest, rent, utilities, property insurance, repairs, upkeep, and food consumed in the home. Do not include medical care, clothing, education, life insurance, or transportation.
Under a special rule, you can qualify as head of household if you maintain a home for a parent of yours even if you do not live with the parent. To qualify, you must be able to claim the parent as your dependent.
You must generally be unmarried to claim head of household status. If you are married, you must generally file as either married filing jointly or married filing separately, not as head of household. However, if you have lived apart from your spouse for the last six months of the year and a qualifying child lives with you and you ‘maintain’ the household, you are treated as unmarried. In this case, you may be able to qualify as head of household.
If you have questions about your filing status, contact us.