The big question when picking your filing status is whether you're married in the eyes of the IRS. Even if you and your spouse live apart, if you're married on Dec. 31, you're married for that year as far as IRS Form 1040 is concerned. That still leaves you with several choices of filing status. Legally married same-sex couples have the same options as opposite-sex pairs, but domestic partners don't.
Filing Taxes When Separated
Even if divorce or legal separation is inevitable, you can file a joint return as long as you're still married. This gives you the best deal on taxes, but you and your spouse both have to agree to file this way. If your spouse wants to file separately, then you have to do that also. Your married but not living together filing status must agree. On a separate return, you report your own income and deductions, and nothing else. With separate returns, if one of you itemizes deductions, the other can't take the standard deduction.
Filing as head of household gives you lower tax rates than a separate return. To qualify, you have to file separately from your spouse, who has to live somewhere else for at least the last six months of the year. You must have a child living with you more than half the year, and you have to pay at least half your household expenses for the year. Make sure you meet these guidelines; there is a penalty for filing as head of household while married. Add up the cost of food, rent, insurance, taxes, utilities and other household expenses, then divide by two to find out how much that is.
If you have dependents and file a joint return, it's no problem claiming an exemption for your children. When you file separate returns, however, the exemption only goes on one return. Usually, the parent who takes care of the child most of the year, according to the separate maintenance decree, gets the exemption. If the child spends half the year with each parent, IRS Publication 501 details who qualifies for the exemption. The publication also lists all the other tests for claiming someone as a dependent.
Exceptions and Special Cases
There are many times when moving out doesn't affect your status. For example, if your spouse is in the hospital for most of the year, or stationed overseas, legally, she's still living with you. You can't claim head of household, so just file a normal separate or joint return. Likewise, a child who has to spend several months in boarding school or the hospital still counts as living at home when you're qualifying him as a dependent.
Filing Your 2018 Taxes
When you file your taxes for 2018, the standard deductions will change considerably over previous years, so that may factor into whether you itemize or choose to take the standard deduction. The standard deduction will be $6,350 for single or married filing separately, $12,700 for married filing jointly and $9,350 for heads of household.
Filing Your 2017 Taxes
If you're filing your 2017 tax return, if you are considered head of household, you may want to take a look at the standard deductions. They increased a bit over what you could take for your 2016 taxes. The standard deduction for single filers in 2017 is $6,350, but it climbs to $9,350 for heads of household. Also, heads of household can earn up to $50,800 in adjusted gross income before being bumped out of the 15 percent tax bracket. That same tax bracket applies to single filers in the $9,826 to $37,920 AGI range.
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