Single taxpayers with qualifying dependents are normally aware of the “Head of Household” filing status available which can result in a lower effective tax rate. However, most taxpayers are not aware that in some conditions this filing status is applicable even if they are married.
For purposes of qualifying for Head of Household filing status, married taxpayers must be CONSIDERED Unmarried. Someone is considered Unmarried if he (she):
1) Files a separate tax return;
2) Paid more than half the cost of keeping up a home during the tax year;
3) Spouse did not live in the same home during the last 6 months of the tax year;
4) The home was the principal place of residence for a qualifying child for more than half of the tax year; and
5) Can claim the child as a dependent (subject to dependency tests and divorce decrees or separation agreements).
With more taxpayers living today in split households, this issue is becoming ever more relevant. It has the potential to result in significant tax dollar savings. If you feel like this situation is applicable to you, talk a tax professional soon.