Your filing status is defined by the Internal Revenue Service and enforced by the courts when necessary. It is one way the U.S. government attempts to ensure American citizens pay their "fair shares" of the operating costs of the government programs that benefit them.
On the individual taxpayer level, filing status is of significance because it influences your tax bracket and tax rate as well as the tax credits and deductions that you may claim. By imposing a citizen's tax liability according to their filing status – their marital status, dependents and role within a family unit – the IRS ensures your fair share is defined by your personal circumstance. Consequently, your filing status, be it head of household, single or something else entirely, has a major impact on your tax liability.
What Is the Purpose of a Filing Status?
In a practical sense, the filing status you elect for a certain tax year determines your filing requirements, including the tax form you'll use, the standard deduction available to you, your eligibility for certain tax credits or deductions and your tax liability. If more than one filing status relates to your circumstance, the IRS expects you to select the one that most accurately reflects your situation. When you do so, it's likely to minimize your tax liability.
The IRS grants you five options in this regard.
- You are a single filer: A single filer is unmarried or legally separated as of December 31 of the tax year.
- You are married filing jointly: The married filing jointly taxpayers must be married as of December 31 of the tax year.
- You are married filing separately: The married filing separately filers file separate tax returns.
- You are head of household (HOH): The head of household filer may be married or unmarried. To file HOH, you must have paid more than 50 percent of the cost of maintaining a home for yourself and a qualifying person, such as a child or another relative.
- You are a qualifying widow(er) with a dependent child: The qualifying Widow(er) filing status requires that the death of a spouse occurred during the previous two tax years and that you have a dependent child.
Criteria for Single and HOH Filing Status
The election of your filing status is the first step in filing your taxes. Typically, your marital status on December 31 of the tax year determines your filing status for the entire year.
However, your marital status alone doesn't determine your filing status. The IRS allows both a single individual and a married person to elect the head of household filing status. Again, your status as of December 31 of the tax year influences whether you can elect the head of household filing status. To file as a HOH, you must have paid at least 50 percent of the costs of maintaining a home for yourself and a qualifying dependent, namely a child or another relative.
Read more: Single Tax Withholding vs. Married
Choosing a Filing Status
When you select a single filer status rather than a head of household status, you are choosing one set of deductions and credits, rather than another. Before you choose your filing status, you must consider whether or not you're actually married.
The IRS Publication 504 defines unmarried for the tax year if, on December 31, you have obtained a final decree of divorce or separate maintenance or have obtained a decree of annulment.
In these cases, the IRS considers you to be an unmarried person with the single filing status for the entire year. For more information about the single filer filing status, see IRS Publication 501, Dependents, Standard Deduction, and Filing Information.
The Head of Household filing status is available if certain condition apply, which include:
- You are single or considered to be unmarried by the IRS.
- You paid more than 50 percent of the costs of maintaining a home for a child or another dependent relative.
- Your spouse didn't live in your home during the last six months of the tax year.
- Your home was the primary residence of your child, stepchild, foster child or a relative for more than half the year.
- You claim the relative as a dependent.
Read more: How Do Income Taxes Work?