When individual income taxpayers begin to complete their Forms 1040 for the filing season, one of the first things they must determine is the proper filing status. The Internal Revenue Code generally breaks the filing statuses into two main categories: single or married.
Single, qualifying widow(er), and head of household statuses fall within the single category, while married taxpayers may file either jointly or separately.
IRC §7703(a)(1) provides that the determination whether taxpayers are considered married or single for income tax purposes takes place on the last day of the tax year, which is Dec. 31 for most individual taxpayers. Taxpayers who were legally married as of the last day of the tax year may generally choose between married filing joint status and married filing separate status. According to IRC §6013(d)(3), married taxpayers who choose to file jointly incur both joint and several liability for tax deficiencies.
Married taxpayers who instead choose to file separately assume responsibility for tax deficiencies on their own separate returns only; however, married taxpayers who file separately may also lose several potential tax benefits such as earned income credit, education-related credits and deductions, and the child and dependent care credit, just to name a few. Consequently, even the IRS recognizes in its Publication 17 that the married filing separate status may cost most married taxpayers in terms of tax dollars, but some individuals may have legitimate, even compelling, nontax reasons for filing separately.
IRC §7703(a)(1) allows qualifying taxpayers who lost a spouse during the tax year to file jointly for the year of death. For the two tax years following the year of death, the surviving spouse may file as a qualifying widow(er). This filing status entitles the taxpayer to claim the same standard deduction as those married taxpayers who file jointly. In order to qualify to take advantage of this filing status, the surviving spouse must remain single during the two-year time period, and must maintain a home for a qualifying dependent.
Taxpayers who were single as of the last day of the tax year, and do not qualify to file as head of household, will file using the single filing status. This filing status applies even if the taxpayer had been married earlier during the tax year, unless a spouse passed away during the tax year as discussed above. According to IRS Publication 17, taxpayers will generally be considered single if they are legally divorced or living apart under a separate maintenance agreement on the last day of the tax year.
Single taxpayers who maintain a home for a qualifying person for more than half the year may qualify to file as head of household. IRC §§7703(b), 2(b) and 2(c) also make special provision for spouses who have been abandoned by the other spouse and continue to provide a home for a dependent child(ren). Under this abandoned spouse rule, the qualifying spouse may file as head of household and take advantage of the head of household standard deduction. In order to qualify the taxpayer must have lived apart from his or her spouse for at least the last six months of the tax year.
Taxpayers need to be aware of the rules in order to make the appropriate filing status determination. Sometimes the determination may not be that simple to make, so a visit to your professional tax advisor may serve you well.
The material in this article is for general informational purposes only and does not constitute tax or legal advice. Please consult with your own tax advisor regarding your personal tax situation.
Assistant Professor Kerri L. Tassin, CPA, JD teaches tax accounting classes in the School of Accountancy at Missouri State University. She also serves as director of the MSU Public Service Tax Clinics.
This article appeared in the August 21, 2016 edition of the News-Leader and can be accessed online here.