tax filing statuses
This blog post covers informational topics about various tax filing statuses. Everything contained within this blog post is not legal, financial, or tax advice. Always consult a tax professional of your choosing.
What is the difference between electing Head of Household and Married Filing Jointly?
The difference between Head of Household (HoH) and Married Filing Jointly (MFJ) filing statuses primarily comes down to marital status, tax rates, and deductions. Here’s how they compare:
Head of Household (HoH)
Who qualifies?
You must be unmarried or considered unmarried (e.g., legally separated) on the last day of the tax year.
You must have paid more than half the cost of maintaining a home.
You must have a qualifying dependent (e.g., child, parent) who lived with you for more than half the year (unless it’s a parent, who doesn’t have to live with you).
Benefits:
Lower tax rates compared to Single filers.
Higher standard deduction ($20,800 for 2024) than Single filers ($13,850).
Can claim tax credits for dependents.
Married Filing Jointly (MFJ)
Who qualifies?
You must be legally married as of December 31 of the tax year.
Both spouses report their combined income, deductions, and credits.
Benefits:
Lower tax rates compared to filing separately.
Higher standard deduction ($27,700 for 2024).
More tax credits available (Earned Income Credit, Child Tax Credit, Education Credits).
Avoids marriage penalties that come with Married Filing Separately (MFS).
Why Choose One Over the Other?
If you are married, MFJ is usually the best option because it offers lower tax rates and more deductions.
If you are unmarried but supporting a dependent, filing HoH gives you better benefits than filing Single.
If you’re married but separated, you might qualify for HoH if you meet the requirements.
Are there situations when a married couple might want to file separately?
Yes! While Married Filing Jointly (MFJ) is usually the best option, there are situations where a married couple might benefit from filing Married Filing Separately (MFS) instead. Here are some reasons to consider filing separately:
1. High Medical Expenses, Miscellaneous Deductions, or Student Loan Interest
Some deductions (like medical expenses and miscellaneous deductions) are based on a percentage of your adjusted gross income (AGI).
Filing separately can lower your AGI, making it easier to qualify for these deductions.
Example: If one spouse has high medical expenses but a low income, filing separately might let them deduct more than if combined.
2. Student Loan Income-Based Repayment (IBR) Plans
If you have an income-driven repayment (IDR) plan for federal student loans, your payment is based on AGI.
Filing separately excludes your spouse’s income, which could lower your monthly payments.
Warning: Some plans (like REPAYE) count both spouses' income regardless of filing status.
3. Legal or Financial Separation / Liability Concerns
If one spouse has large tax liabilities, lawsuits, or debt issues, filing separately can protect the other spouse from being responsible.
This is especially important if one spouse suspects the other of fraudulent tax reporting.
4. One Spouse Owes Back Taxes, Child Support, or Student Loans
If one spouse has IRS debt, past-due child support, or defaulted student loans, a joint refund might be seized to pay these debts.
Filing separately ensures that the other spouse still gets their refund.
5. One Spouse Prefers Privacy
If one spouse doesn’t want to share financial details with the other (due to separation or other reasons), filing separately keeps incomes separate on tax documents.
Downsides of Filing Separately
Lower standard deduction ($13,850 per person in 2024 vs. $27,700 for MFJ).
Many credits get reduced or disallowed, including:
Earned Income Credit (EIC)
Child and Dependent Care Credit
Education Credits (American Opportunity & Lifetime Learning)
Higher tax rates compared to MFJ.
When Should You Run the Numbers?
If any of the situations above apply to you, it’s worth using a tax calculator or professional to compare MFJ vs. MFS v HOH before deciding.
You should itemize deductions instead of taking the standard deduction when the total amount of your itemized deductions exceeds the standard deduction for your filing status.
Standard Deduction for 2024 (IRS)
Single: $13,850
Married Filing Jointly (MFJ): $27,700
Head of Household (HoH): $20,800
Married Filing Separately (MFS): $13,850
When Should You Consider Itemizing?
Consider itemizing if:
Your total itemized deductions exceed the standard deduction.
You have large medical expenses (exceeding 7.5% of your AGI).
You own a home and have significant mortgage interest and property taxes.
You have large charitable contributions.
You had major casualty or theft losses (and qualify under IRS rules).
Common Itemized Deductions
Medical & Dental Expenses
Deductible if they exceed 7.5% of AGI.
Includes doctor visits, prescriptions, surgeries, medical travel expenses, etc.
State & Local Taxes (SALT Deduction)
Deduct up to $10,000 for state/local income tax, sales tax, and property taxes.
Mortgage Interest & Points
Interest on a mortgage up to $750,000 of debt (if purchased after Dec 15, 2017).
Points paid to reduce mortgage interest.
Charitable Contributions
Up to 60% of AGI in cash donations to qualified charities.
Non-cash donations (clothing, furniture) require documentation.
Casualty & Theft Losses (Rare)
Must be from a federally declared disaster.
Miscellaneous Deductions (Limited)
Unreimbursed work-related expenses (for specific jobs, like armed forces reservists).
Gambling losses (only up to winnings).
Who Typically Itemizes?
Homeowners with high mortgage interest and property taxes.
High-income earners in high-tax states (NY, CA, NJ, etc.).
People with large medical expenses.
Those who make significant charitable donations.