Heads of household and married filing joint are two ways to file your taxes. Both are attractive options, especially if you want to reduce your tax burden or have more control over the process. While heads of household allow for greater flexibility in this area, marriage allows you to take advantage of certain benefits. However, not everyone will qualify for either of these filing statuses, so learning about the differences between the head of household versus married filing jointly is important before deciding which option is best for you.
Head of Household Meaning
The filing status of head of household is available to unmarried taxpayers who maintain a home for themselves and their dependent children. To qualify as head of household, the taxpayer must be considered unmarried for tax purposes (generally, this means that the taxpayer is not married or considered to be living in a common-law marriage), and must have paid more than half the cost of maintaining the home during the tax year. The taxpayer must also have had a dependent child living in the home for more than half the year.
Married Filing Jointly Meaning
The married filing jointly status is the most common filing status for married couples. When you file a joint return, you and your spouse are each responsible for the entire tax bill. This means that if one of you doesn’t pay, the other is on the hook for the entire amount.
There are some advantages to filing jointly, though. For one, you’ll usually get a lower tax bill than if you filed separately. And, if one spouse has a lot of debt, it can be beneficial to file jointly so that the other spouse’s good credit isn’t affected.
The Benefits of Filing as Head of Household
One of the key benefits of filing as Head of Household is that it allows taxpayers to take advantage of a lower tax bracket. For example, in 2018, the top marginal tax rate for Head of Household filers was 37%, while the rate for Married Filing Jointly filers was 39.6%. This can result in significant savings for taxpayers who are able to take advantage of the lower rate.
Another benefit of filing as Head of Household is that it can provide taxpayers with a larger standard deduction. For example, in 2022, the standard deduction for Head of Household filers is $19,400, while the deduction for Married Filing Jointly filers is $25,900. This can also lead to significant savings for taxpayers who are able to claim the larger deduction.
Finally, filing as Head of Household can also help taxpayers qualify for certain tax credits and deductions that they would not be eligible for if they filed as Married Filing Jointly. For example, the Earned Income Tax Credit is only available to taxpayers who file as Head of Household. This credit can provide significant financial assistance to low- and moderate-income taxpayers who are struggling to make ends meet.
Can married couples file as Head of Household?
No, married couples cannot file as Head of Household. The Head of Household filing status is reserved for unmarried taxpayers who maintain a household for a dependent. To qualify as Head of Household, you must be unmarried or considered unmarried on the last day of the year, you must have paid more than half the cost of maintaining a home for the year, and a dependent must have lived with you for more than half the year.
What’s the penalty for filing as head of household while married?
If you file as head of household while married, you may not be subject to a tax penalty. However, you may be subject to a failure-to-pay penalty for filing with another status. This penalty is 0.5% (one-half of one percent) for each month you don’t pay, up to a maximum of 25%. You may also be subject to fines for negligence or tax fraud.
How to Decide if You Should File as Head of Household or Married Filing Jointly
There are a few key differences between Head of Household (HoH) and Married Filing Jointly (MFJ) that can help you decide which filing status is right for you. The most important factor to consider is whether you are considered the primary earner in your household. If you make more money than your spouse and/or provide the majority of financial support for your family, then you may want to consider filing as HoH. This filing status can provide some significant tax benefits, including a higher standard deduction and lower tax rate.
Another key difference between HoH and MFJ is the eligibility requirements. To qualify as HoH, you must be unmarried or considered unmarried on December 31st of the tax year. You must also have paid more than half of the household expenses, including rent or mortgage, utilities, insurance, etc. If you don’t meet these requirements, then you will need to file as MFJ.
So, how do you decide if you should file as Head of Household or Married Filing Jointly? Consider your income, your spouse’s income, and your overall financial situation. If you have any questions, be sure to speak with a qualified tax professional to get the best advice for your specific situation.
Which is Better for You – Head of Household or Married Filing Jointly?
Head of household is generally beneficial if you’re the primary breadwinner in your family. This status allows you to claim a higher standard deduction, which can result in a lower tax bill. However, it also means that your spouse’s income will be taxed at a higher rate.
Married filing jointly is usually the best choice if you and your spouse earn similar incomes. This status allows you to pool your resources and deductions, which can lead to a lower overall tax liability. However, it also means that you’re both equally responsible for any taxes owed.
ultimately, the best way to decide which status is right for you is to speak with a tax professional. They can help you evaluate your individual situation and make the best decision for your needs.
In Summary
There are a few key differences between filing as head of household and married filing jointly. Head of household filers must be unmarried or considered unmarried on the last day of the year, and they must also have paid more than half the cost of maintaining a home for themselves and any qualifying dependents. Married filing jointly couples, on the other hand, simply have to be married at any point during the tax year. Additionally, joint filers can claim certain deductions and credits that are not available to head-of-household filers. Ultimately, which filing status is right for you will depend on your unique circumstances.