Filing your federal income tax return can be a challenge. What can you deduct? What income do you have to claim? But you face a more important issue before you even get around to considering these questions: What’s your filing status?
This is important because so many other factors hinge on your answer. The Internal Revenue Code offers five filing statuses with some pretty complex rules applying to each.
The Single Status
You might think this one is pretty straightforward. You’re not married, so you’re single, right? Maybe not.
First, only one date matters here: Dec. 31. If you were legally married on that date, you’re probably not considered single for tax filing purposes. The Internal Revenue Service says you were married for the whole year if you get married just before midnight on Dec. 31. Likewise, you were single for the whole year if you were divorced on Dec. 31.
Of course, this is more clear-cut if you were never married, but there are still some gray areas.
Exceptions to the "Single" Rules
According to the IRS, you're technically single if you and your spouse are legally separated by court order – not just living apart, even if you have a separation agreement. This is the case unless you qualify for the head of household filing status, and that’s subject to its own long list of rules.
As for registered domestic partners, you’re not technically married, so you’re single, again assuming you don’t qualify as head of household.
Are You Head of Household?
You must be “considered unmarried” to qualify as head of household, according to the IRS. You might be legally married, but the IRS will give you the nod if you haven’t lived with your spouse at any point during the last six months of the year. You might have a court-issued separation order, or maybe you just went your separate ways. The important thing is that you didn’t live together at any time after July 1.
The IRS says you’re single if “you do not qualify for another filing status,” and head of household is one of the more advantageous options.
Who Pays Your Bills?
If it were that easy, every unmarried individual in the U.S. would be filing as head of household to take advantage of the associated tax breaks. Unfortunately, it’s not that easy.
In addition to being considered unmarried, you must also have paid at least 51 percent of the cost of maintaining your home throughout the tax year. But this doesn’t necessarily mean that you’re head of household if you’re single, live alone and pay 100 percent of the household bills. You must also have a dependent, and in most cases, that dependent must live with you for more than half the year.
But the IRS is somewhat generous with its "living together" rule. Temporary absences don’t count, such as if your dependent is your college-aged child who spends eight months a year living away at school. Your house is still their home base.
Your dependent doesn’t actually have to live with you as long as you pay for more than half the costs of their household. Some other “qualifying person” adult dependents don’t have to live with you. So technically, yes, you could be single and living alone and still qualify as head of household.
The Married Filing Jointly Option
Maybe none of these finer details matter if you’re definitely married and you're living with your spouse. You qualify for two different filing statuses in this case.
Your first option is to file a joint married return. You’ll claim both your incomes on the same tax return, and you'll take all available deductions and tax credits jointly as well. This status offers the most tax perks and you can file this way even if you married on the last day of the year. Same-sex spouses have qualified for this status since 2015 when the U.S. Supreme Court ruled that same-sex marriages must be recognized in all 50 states.
But this filing status does come with some tax liability. You and your spouse are each individually responsible for 100 percent of the tax due on a joint return, even if you didn’t personally earn a dime of it. You’re also both responsible for the accuracy of the return, even if you’re personally unaware of any errors or omissions. You're "jointly and severally liable" for that return.
You’re a Married Couple, But…
Your other option is to file a separate married return without your spouse if the IRS says you're married. On the bright side, you’ll only be responsible for taxes on your own income, and you can only be held liable for information or mistakes included on your own tax return. The drawback is that the Internal Revenue Code slams the door on quite a few nice tax breaks if you file this way.
You can’t claim either of the education-related tax credits, and you can’t claim the earned income tax credit either. And if one of you claims the standard deduction rather than itemizing or vice versa, the other must do the same. You’re limited to filing a separate return if your spouse refuses to sign a joint return with you – unless, of course, you qualify as head of household.
One Last Option
The IRS stands by ready to assist if your spouse dies. First, you can still file a joint married return for the tax year in which they died. Then you might be able to use the qualifying widow(er) filing status for the next two tax years if you have a dependent child.
Stepchildren and adopted children qualify. All the beneficial married-filing-jointly standard deductions and tax rates will continue to apply to you for another two years.
You can’t claim this filing status if you remarry, however, and you must pay for more than half your household’s expenses for the year, just as you would to qualify as head of household.
Which Is Best? A Comparison
Many taxpayers aren’t limited to just one filing status, thanks to these complex rules. Which should you choose if it turns out that you qualify for more than one? Obviously, you’ll want to elect the option that results in paying the least federal tax.
According to the IRS, the married filing separately status would come in dead last if you were to rank which filing status is most beneficial. Married filing jointly and qualifying widow(er) statuses more or less tie for first place. This leaves all those “considered unmarried” folks in the middle, but the head of household status is far more advantageous than filing as a single taxpayer.
A Look at the 2021 Tax Brackets
Current tax law provides for seven tax rates at 10, 12, 22, 24, 32, 35 and 37 percent as of tax year 2021, the return you'll file in 2022. The rates depend on how much you earn. The U.S. tax system is progressive, so as your earnings go up, so does your tax bracket on that portion of your income.
Let’s say your taxable income is $50,000 in 2021. This puts you in a top tax bracket of 22 percent if you’re single, but only 12 percent if you can file as head of household. You’re also at just 12 percent if you’re married and filing jointly or a qualifying widow(er), but you’re back up to 22 percent if you’re married and file a separate tax return.
And if your taxable income is $100,000? The gap between filing single, as head of household, or married filing a separate return closes up. All are subject to a top rate of 24 percent at this income. But it drops to 22 percent if you’re married and file jointly or if you’re a qualifying widow(er).
The income parameters for tax brackets shift slightly from year to year to keep pace with inflation, but rarely by more than a few hundred dollars. These percentages also apply to these incomes in 2022.
The Standard Deductions
There’s no difference between the single or married filing separately status when it comes to the standard deduction you can claim if you don’t itemize your deductions. It’s set at $12,550 for both statuses in the 2021 tax year, but you’ll get an extra $6,250 if you can file as head of household – this standard deduction is $18,800 in 2021. And if you’re happily married and filing a joint return? You win the standard deduction sweepstakes. It goes up to $25,100.
These figures increase to $12,950, $19,400 and $25,900 respectively for the 2022 tax year.
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.