Married Filing Separately Vs. Head of Household

When filling out your tax return, two potential classifications are married filing separately and head of household. Both involve filing your taxes without a spouse's information. However, that's where the similarities end. Head of household filers enjoy a higher standard deduction, lower tax rates and more potential credits and deductions than their married filing separately counterparts.

Standard Deduction

Taxpayers who don't itemize on their return can take the standard deduction, which reduces taxable income. For 2015, the standard deduction for head of household is $9,250. In contrast, the standard deduction for married filing separately is equal to the standard deduction for single filers, or $6,300. This difference in standard deductions means that a head of household filer will have a taxable income that's $2,950 less than a married filing separately filer, assuming they both claim the standard deduction.

Tax Brackets

The tax brackets for head of household are more generous than they are for married filing separately. For example, for the 2015 tax year, head of household filers pay 10 percent on the first $13,150 of their taxable income. In contrast, married filing separate filers pay 10 percent only on the first $9,225 of their income, which means that more income is taxed at the 15 percent tax bracket. This trend continues for each successive tax rate bracket. This means that married filing separately filers almost always pay higher tax rates compared to a head of household filer with the same amount of taxable income.

Credits and Deductions

Head of household filers can claim any available tax deductions or credits, assuming they meet the qualifications. However, there are certain credits and deductions that a married filing separately filer never can take, even if they otherwise qualify for them. Prohibited deductions and credits for married filing separately filers include:

  • Credit for child and dependent care expenses
  • Earned Income Tax Credit
  • American Opportunity Tax Credit
  • Lifetime Learning Tax Credit
  • Deduction for student loan interest expense

Other Limitations

Since head of household filers are unmarried, they don't have to consider anyone's tax situation except for their own. Those who select married filing separately, however, sometimes are constrained by what their spouses report on their respective tax returns. For example, a married filing separately filer can't claim the standard deduction if his spouse itemizes deductions. If a married filing separately filer lived with his spouse at any point during the tax year, he can't deduct passive losses from real estate rental activities and can't claim the Credit for Elderly or the Disabled.