My name is Phillip Sinclair. I am a CPA in Longview, Texas. I am considering periodically sending out free articles via e-mail regarding taxes, financial planning, estate planning, and general business. However, I must know if there is sufficient interest to pursue such an endeavor. If you are interested, please e-mail me at firstname.lastname@example.org with the subject SUBSCRIBE and if I have a sufficient response, I will send out periodic newsletters. If you want to find out about my firm, and me, go to www.sinclaircpa.com . If you know of anyone who may be interested in this, please forward this message to him or her so they can decide whether or not to subscribe. I have taken the liberty to include my first such article below (Actually, I have included three subjects since they are very related). I hope you find them interesting, informative, and helpful.
Phillip G. Sinclair, CPA
Filing Status in the Year of Marriage or Divorce
If you get married or divorced at any time during the year, what filing status should you use?
The tax law requires you to file based upon your status on the very last day of the year (i.e. December 31 st ). If you get married, you must file as married filing jointly, married filing separately, or, if there are qualifying dependents, you may file as head of household (see below).
If you get divorced, you must file as single, or, if there are qualifying dependents, you may file as head of household (see below).
Filing Status in Year of Spouseís Death.
Qualifications for a Joint Return
In the year of a spouseís death, the survivor and deceased spouse generally are considered married for the entire year for tax purposes. Therefore, the survivor can file a joint return with the deceased spouse. This rule also applies if both spouses die during the same tax year. However, if the surviving spouse remarries before year-end, "married filing separately" status must be used for the decedentís final return.
How do you qualify for Head of Household status?
Failure to use head of household (HOH) filing status is one of the most common tax preparation blunders cited by the IRS. HOH status is preferable to single or married filing separate status because tax rates are lower and the standard deduction is larger.
Requirements for Head of Household Status
To qualify as HOH, a taxpayer must meet both of these requirements:
1. Be unmarried (or considered unmarried for this purpose) on the last day of the tax year.
2. Have paid more than half the cost of maintaining a home that was the principal home for more than half the year for the taxpayer and any of the following persons:
a. An unmarried child, grandchild, stepchild, or adopted child even if an exemption deduction cannot be claimed for these children. These children must be the taxpayerís children.
b. A married child, grandchild, stepchild, or adopted child of the taxpayer if an exemption deduction can be claimed for such person (or could be claimed) except that:
(1) the taxpayer allows in writing the noncustodial parent to claim the dependent, or
(2) the noncustodial parent provides at least $600 for the dependentís support and claims the dependent under a pre-1985 divorce agreement.
c. A foster child who can be claimed as a dependent.
d. A relative, or any other person who is a dependent of the taxpayer, for which an exemption deduction can be claimed for such person. For this purpose, a relative includes a:
Parent, Grandparent, Brother (including half brother), Sister (including half sister), Stepbrother, Stepsister, Stepmother, Stepfather, Mother-in-law, Father-in-law, Brother-in-law, Sister-in-law, Son-in-law, Daughter-in-law;
Or, if related by blood, Uncle, Aunt, Nephew, or Niece.
The requirement to pay more than half of the expenses of maintaining the home is not the same as providing more than half the support of a child for the dependency exemption. The expenses of maintaining the home would include such costs as property taxes, insurance, mortgage interest payments, maintenance, and providing food on the premises. It would not, however, include support costs such as clothing, medical expenses, education, etc.
But beware: the same person cannot be used to qualify more than one taxpayer for HOH status in the same year. In addition, a person for whom a dependency exemption can be claimed pursuant to a multiple support agreement cannot qualify a taxpayer for HOH status.
Please note that the above is a brief overview of filing statuses. Please consult your tax advisor regarding your particular circumstances. If you do not have a tax advisor, I can assist you in evaluating your particular circumstances.
Last Updated 11/11/2009