Single Filing Status: A Guide to Choosing The Right Filing Status

The single filing status is something of a catch-all basket. It's the default status for taxpayers when nothing else fits.

If you’re unmarried but don’t have a dependent, you can’t qualify as head of household, so the IRS says you’re single. The same would apply if you’re unmarried and have a dependent, but you don’t pay more than half the expenses of keeping up your household for the year. You’re single.

The single status isn’t particularly advantageous. The pivotal factor in determining whether you fall into this category is your marital status, and that can be surprisingly complicated.

Are You or Aren’t You Married?

Only one day matters when you’re answering this question: Dec. 31. Your status on the last day of the year dictates your tax filing status for the whole year. Obviously, if you’ve never married, this isn’t an issue – you’re single unless you have a dependent. The same applies if your marriage was annulled – this is a legal way of saying it never happened in the first place.

But if you were married at some point and you have a divorce decree issued on or before Dec. 31, you can’t file a married return. You can only file using the single status or, if you qualify, head of household.

The same applies if you’re not actually divorced but you have a legal separation order. This can’t be an order that's only in effect until your divorce is final. It has to be a permanent separation order. It can’t be a separation agreement contract entered into between you and your spouse.

So what if you’re neither divorced nor legally separated but you and your spouse haven’t lived together the last six months? You might qualify as head of household. Otherwise, if you’re still residing in the same home with your spouse or have done so within the last six months, you’re married, not single, for federal tax filing purposes. You must file either a joint or separate married return.

The Standard Deduction

You’ll receive the lowest standard deduction if you must file using the single status, just $12,200 in the 2019 tax year compared to the $18,350 that head of household filers can claim. But it increases to $12,400 in 2020.

Married couples who file joint returns qualify for double the single amount: $24,400, up to $24,800 in the 2020 tax year.. But if you’re married and file a separate return for some reason, you’re limited to the same $12,200 deduction that single filers are entitled to.

Standard Deductions By Year

These numbers are indexed for inflation, meaning that they can creep upward incrementally from year to year to keep pace with the economy. They’re up from $12,000, $18,000 and $24,000 in the 2018 tax year.

And they increase a little more in 2020, to $12,400, $18,650 and $24,400, respectively.

Tax Rates and Tax Brackets

The tax brackets for single filers won’t have you jumping for joy, either.

Let’s assume that you have a modest taxable income of $40,000 after you’ve claimed all the deductions you’re eligible for. This puts you in a top 22 percent tax bracket if you must file using the single status in 2019, although the parameters change just a smidgen in 2020 – you can earn up to $40,125 in the 2020 tax year before tipping over into the 22 percent bracket. But you’ll pay only a 12 percent top rate if you qualify as head of household, or if you’re married filing a joint return.

More Inflation Adjustments

The income spans for tax brackets are tweaked annually as well. The percentage amounts don’t change – that literally requires an act of Congress – but the income that’s accommodated by each can vary by a few hundred dollars.

For example, the 22 percent bracket for single filers began at $38,701 in 2018. It increased to $39,475 in 2019, and it goes up to $40,125 in 2020.

Other Effects – The Alternative Minimum Tax

Of course, there’s a lot more involved with taxes than the standard deduction and tax brackets. You’ll take a bit of a hit in other areas as well if you must file as a single taxpayer.

First among these considerations is the alternative minimum tax, sometimes not-so-aptly referred to as the “mini tax.” It was put into place in the 1960s when Congress had an eye-popping revelation: The wealthiest American citizens were dodging taxes, sometimes not owing any at all, by claiming just about every tax deduction available.

The thinking was that because they earned more, they could therefore spend more on qualifying tax-deductible expenses, thus reducing their taxable incomes to zero, and they did just that. So Congress passed the AMT.

All filers are now entitled to an AMT exemption based on filing status – basically, the AMT won’t apply to you unless you earn more than this. If you do earn more, you have to calculate your tax two ways, once under the normal rules and again adding back in certain deductions and applying sometimes higher rates. Then you must pay whichever tax bill amounts to more.

Single taxpayers get only a $71,700 exemption in 2019, although it’s higher in 2020 at $72,900. This increases to $111,700 if you’re married and file a joint return. You don’t get a break with the AMT if you’re head of household – your exemption is the same as it is for single filers.

Exemptions Have Changed, Too

You’re probably figuring out by now that the IRS adjusts a lot of thresholds each year to accommodate inflation, and the AMT is no exception. The exemption for single filers was just $70,300 in 2018, but it’s up to $72,900 for the 2020 tax year.

The Earned Income Tax Credit

This is the tax credit that’s designed to put dollars back into the pockets of low-income and some middle-income taxpayers. The EITC is refundable, which means that if there’s anything left over after it eliminates any tax you might owe for the year, the IRS will kindly send you a check for the balance. It’s based on a few interlocking factors, including income and the number of child dependents you're supporting.

If you’re single and have no children, you can earn up to $15,570 in 2019 and remain eligible for this tax credit, but you can earn up to $21,370 if you file a joint married return. Heads of household and single filers are treated equally for purposes of the earned income tax credit too. Married taxpayers who file separate returns aren’t eligible for this tax credit at all.

EITC Changes

The 2019 income threshold for single filers is up from $15,270 with no children in 2018, and from $20,950 for joint married filers. It’s anticipated that the IRS will release 2020 thresholds by Jan. 1.

Long-Term Capital Gains Tax Rates

This difference between filing statuses can be really significant. Single filers also pay more in the way of the long-term capital gains tax that can result from the sale of assets owned for longer than a year.

These tax rates are hinged to their own tax brackets beginning in 2018. Again assuming that you have taxable income of $40,000 and you’re single, you’ll pay a 15 percent long-term capital gains rate. Not so if you’re head of household or married and filing a joint return. You’ll pay zero in capital gains tax at this income if you can use either of these filing statuses.

When You Might Qualify as Head of Household

By now, you might be ready to ask the next stranger on the street to marry you immediately, but you might not have to do anything that drastic. Remember, this single filing status is what you’re stuck with if you don’t qualify for anything else.

Tips

  • You might qualify as head of household if you have at least one dependent – either a qualifying child or a qualifying relative – and if you pay at least half the cost of keeping up your home during the tax year.

Your qualifying child must live with you for more than half the year, such as if you’re the custodial parent, or another qualifying person must live with you the entire year. But some qualifying persons who are actually relatives don’t have to live with you at all if you instead pay more than half the cost of keeping up their homes for the year.

The rules for this filing status are quite complex, so check with a tax professional if you think there’s any chance at all that you might qualify and save yourself some tax dollars.

When You Might Be a Qualifying Widow(er)

You have a similar option if you're single because your spouse died – at least for a little while. First, you’re not considered unmarried for the tax year in which he died. You can still file a joint married return for that year. Then, if you have a qualifying dependent child, and if you don’t remarry, you might be able to file as a qualifying widow(er) instead of as a single taxpayer. This allows you to continue to claim the more beneficial tax perks of being married for an additional two years.

Just as with the head of household status, however, you must pay more than half the cost of keeping up your dependent’s home during the tax year.

When Can You Claim Your Child as a Dependent?

The crucial difference between the single filing status and that of head of household is having one or more dependents. This can get tricky because, if you’re single, you can bet that your child’s other parent probably really wants to claim her as a dependent, too, for the same reason. You both want to avoid being single for tax filing purposes.

Unfortunately, only one taxpayer can claim each dependent. The IRS has special rules in place if you and your ex can’t agree on who gets to claim your child as a dependent for tax purposes. If you both try to claim your child, the IRS will make the decision for you based on these “tiebreaker” rules.

First, your child must live with the qualifying parent for more than half the year, so this typically means that the child is claimed by the custodial parent. But if your child lived with both of you equally, a different rule applies. The IRS will give the right to claim her as a dependent to the parent with the higher adjusted gross income.

You Might Have to File Form 8332

Let’s say that your ex meets the two rules above. Your child lives with her most of the time, and she earns more than you do. But she’s remarried, so she’s getting all those nice married-filing-jointly tax perks. She takes pity on you and lets you claim your child as a dependent instead so you can dodge some of the effects of the dreaded single filing status bullet.

Yes, she can do this, but it requires filing an additional form with your tax return. She must sign IRS Form 8332, formally giving you the right to claim the dependent she would otherwise be eligible to claim according to the IRS tiebreaker rules. Then, after she signs the form, you must submit it to the IRS along with your tax return. Unfortunately, this will only allow you to claim certain child-related tax credits. It won't qualify you as head of household.

All the same, it might take a little of the sting out of those single standard deductions and tax rates.

References

About the Author

Beverly Bird has been writing professionally for over 30 years. She is also a paralegal, specializing in areas of personal finance, bankruptcy and estate law. She writes as the tax expert for The Balance.