When you get divorced, you can no longer file your tax returns as “Married Filing Jointly” or “Married Filing Singly.” Even if you get divorced on December 31, the IRS considers you were not married for that whole year. Therefore you cannot use either of these two “Married” filing statuses. What can you use? Either “Single” or “Head of Household.”
Head of Household almost always pays less tax than Single, for two reasons:
- More of your taxable income will fall into lower tax brackets and
- You can claim a higher standard deduction which allows you to exclude more income from taxation.
The federal standard deduction amount in 2022 for Head of Household is $19,400. For Single it is $12,950.
Head of Household Filing Requirements
To qualify as a Head of Household you must:
- pay for more than half of your household expenses;
- have a qualifying child or dependent; and
- be considered unmarried for the tax year.
The first criteria means you must have paid more than half of the total household bills for the tax year. This includes rent or mortgage, utilities, insurance, property taxes, groceries, repairs and other common household expenses.
To have a qualifying child, the child must meet criteria including:
- having lived in your home for more than six months during the tax year;
- not having paid for more than half of his/her living expenses during the tax year; and
- As of 12/31, the child must be under 19 if not a full-time c0llege student, or under 24 if a full-time college student.
To be considered unmarried for the tax year means:
- You file a separate return;
- You paid more than half of the cost of keeping up your home for the tax year;
- Your spouse did not live in the home during the last 6 months of the tax year;
- Your home was the main home for your child for at least 6 months of the tax year.
Divorced or Separated Parents
There are special rules for divorced or separated parents. If your child lived in your home for more than half of the year, you may qualify as Head of Household. This is true even if the divorce or separation agreement gives the other parent the right to claim the child as a dependent. This assumes the other requirements above are met.
Note that “more than half of the year” can be as little as six months and one minute. Do you have more than one child and a 50/50 timeshare for them? Often each of you can qualify to use the Head of Household filing status. Be sure to discuss this with your divorce mediator or a Certified Divorce Financial Analyst.