There are tax advantages for filing head of household compared to filing single. Can you file head of household by claiming your significant other, such as boyfriend or girlfriend, as a dependent?
You will benefit from lower tax rates and a higher standard deduction by filing head of household compared to filing single. You are allowed to claim head of household status if you are unmarried at the end of the year and you can claim a dependent on your return. Your significant other, such as a boyfriend or girlfriend, does qualify as a dependent for the purpose of filing head of household if he or she is considered your qualifying relative according to IRS Publication 17 (Pub 17).
Test 1 – Not a Qualifying Child
All jokes aside, your significant other can not be your qualifying child.
Test 2 – Member of Household or Relationship Test
Your significant other must live with you as a member of your household for the entire year. There are exceptions for temporary absences. For example illness, education, business, vacation, and military service. Furthermore, if your significant other died during the year, this test is met if he or she was a member of your household until death. Please read IRS pub 17 for more explanation on the relationship test.
Test 3 – Gross Income
Your significant other can not earn more than $3,800 of gross income. This includes all taxable gross income. For example, your significant other has one rental property. The monthly rent is $500 per month and the expenses are $600 per month. This will result in a net loss at the end of the year. For the purpose of this test, your significant other would not qualify as a dependent because the gross income from rent collected is $6,000 ($500 * 12) which is greater than $3,800.
Test 4 – Support Test
Generally, you must provide more than half of the total support for your significant other. Your significant other spends $2,000 on there own support. To meet this test, you must provide at least $2,001 of support. Support includes amounts spent to provide food, lodging, clothing, education, medical and dental care, recreation, and transportation.
There are some special circumstances to consider when reviewing this test.
- Your significant other earns $2,00o. He or she uses $1,700 towards support and puts the remaining $300 in their savings account. $1,700 is the amount used for this test.
- Non-taxable income is considered when calculating your significant other’s support. For example, non-taxable social security benefits. If your significant other uses $5,000 of non-taxable social security benefits for his or her support then you will need to provide at least $5,001 of support to meet this test.
- You can include the fair rental value of lodging provided as support. For example, your significant other does not contribute to the mortgage or rent. Include in your support the amount you could reasonable collect from a stranger for the same kind of lodging.
Please refer to IRS Pub 17 for more details on claiming your significant other as a dependent. If you have questions, call ALG Tax Solutions 855-MI-Tax-Help (855-648-2943), provide your contact information online, or click Ask Your Question.
IRS Circular 230 Disclosure: To the extent this writing contains advice on a federal tax issue, the advice is not intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed in this communication.