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What is HEAD OF HOUSEHOLD status for IRS purposes?

Q. What is the effect of claiming "head of household" status in a tax return?


A. Head of household does not apply to joint tax returns. If you are divorced, or if you are married filing separately, you may be entitled to claim HH status. This is also often referred to as HH/MLA (married living apart). There are important tax advantages to filing HH/MLA. It is not an exemption, but a filing status just like filing "married," "married filing separately," and "single."

To qualify you must be separated from your spouse during the last 6 months of the calendar year and have at least one child living with you for more than 50% of the time. You may well pay less taxes to the IRS if you can claim it.

There is an extremely important piece of knowledge here that many attorneys and most family law judges seem to forget or ignore: In situations where each parent has exactly 50% custody of the children, neither can file HH/MLA. 50-50 custody is a common shorthand way to characterize true joint physical custody arrangements. But to be eligible for this filing status, the custody cannot be exactly the same for each parent; if you presently share custody per a equal custody order, you would do well to modify the order (and even alter slightly your actual custodial timeshare). All you need do to avoid this problem is give one parent 50.1% custody and the other 49.9%, particularly in any orders that are drafted and filed with the Court. Squabbling over these percentages is a waste of time and money - it will not hurt you to be the 49.9% parent.

If there is more than one child, then parents can modify the parenting schedule so that each can claim one in order to maximize each party's tax savings and the support dollars.

Your filing status is important to your spousal and child support rights and obligations. Family Code § 4059(a) requires that child support orders be based upon accurate tax filing assumptions, and the support programs (the Dissomaster, Xspouse) similarly require a status to be selected before a support number can be rendered.

For a payor spouse, the child support will be less if the filing status is Single than it will be if the status is HH/MLA, but if you truly file Single the costs paid to the government will likely exceed any perceived savings on child support. This is because a person has more net disposable income after taxes when they are HH/MLA or even MFS than when they are Single. In the same way, the child support may be less for a parent claiming HH/MLA depending upon their income but if they have little income the HH/MLA may have little or relatively little economic value to them.

This is a good example of how Mediation and/or Collaborative Divorce can be used to benefit separating spouses. Money can be saved for both parties where they structure their dissolution to maximize tax benefits and minimize tax consequences to each - which nobody typically considers or does in the midst of a hostile, contested divorce. The IRS benefits when couples are at war! In a mediated or collaborative dissolution, neutral tax experts can be consulted and used to design agreements that save the higher earning parent money while increasing the cash available to the supported spouse and for children. Would you not rather give money to your kids than to Uncle Sam?

Thurman W. Arnold III


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