For divorced or divorcing people, the Head of Household tax filing status can usually lower your tax liability significantly. If you qualify as Head of Household, you will have a lower tax rate and a higher standard deduction than a Single filer. Also, Heads of Household must have a higher than Single filers before they owe income tax.
I. General Test
You may be able to file as head of household if you meet all the following requirements:
- Unmarried / Considered Unmarried. You are unmarried or “considered unmarried” on the last day of the year.
- Keeping Up the Home. You paid more than half the cost of keeping up a home for the year.
- Child Resides Majority of Year. A qualifying person lived with you in the home for more than half the year (except for temporary absences, such as school).
II. “Considered Unmarried”
To be “considered unmarried” on the last day of the tax year you must meet all the following tests.
- Separate Return. You file a separate return. A separate return includes a return claiming married filing separately, single, or head of household filing status.
- Spouse out of Home Last Six Months. Your spouse didn’t live in your home during the last 6 months of the tax year. Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances. See Temporary absences, later.
- Eligible to Claim Exemption. You must be eligible to claim an exemption for the child. However, you meet this test if the reason you can’t claim the exemption is that it has been allocated to the other spouse by agreement, order, or judgment.
III. Keeping Up the Home
To qualify for head of household status, you must pay more than half of the cost of keeping up a home for the year – even if the source of the income used to pay for such upkeep is support from the other spouse.
These are the costs you include:
- mortgage interest,
- real estate taxes,
- insurance on the home,
- food eaten in the home
These costs cannot be included:
- medical treatment,
- life insurance
IV. Temporary absences
You and your qualifying person are considered to live together even if one or both of you are temporarily absent from your home due to special circumstances such as illness, education, business, vacation, military service, or detention in a juvenile facility. It must be reasonable to assume the absent person will return to the home after the temporary absence. You must continue to keep up the home during the absence.