When it comes to taxes, December 31 is more than just New Year’s Eve. That date will affect the filing status box that will be checked on your 2020 tax return. When filing a return, you do so with one of five tax filing statuses. In part, they depend 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 could change during the year.
Here are the filing statuses and who can claim them:
- Single: This 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. Special requirements 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.
How to Qualify as ‘Head of Household’
In general, head of household status is 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 one 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 under age 24 if enrolled as a student
- Does not provide over half of his or her own support for the year
If a child’s parents are divorced, different rules may apply. Also, a child is not eligible to be a ‘qualifying child’ if he or she is married and files a joint tax return or is not a U.S. citizen or resident.
There are other head of household requirements. You are considered to maintain a household if you live in it for the tax year and pay more than half the cost. 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 even if you do not live with him or her. To qualify, you must claim the parent as your dependent.
Determining Marital Status
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, a qualifying child lives with you and you ‘maintain’ the household, you are treated as unmarried. In this case, you may qualify as head of household.
Contact us if you have questions about your filing status. We also would be happy to discuss this with you when we prepare your return.