Filing status for separated couple living separately for entire year, and itemizing?

[Suchin21]

I have been separated (not legally as we do not have legal separation in Virginia) and have lived in separate households with my ex since April 2023. I meet all the qualifications to file as HoH. If I file as HoH, he needs to file married filing separately since he does not have a qualifying child living with him. I will be taking the standard deduction. Does he need to take the standard deduction as well, or does he have the option to itemize his expenses?

I know if we were both filing MFS, we would need to either both take the standard deduction or both itemized, but not sure if that is still true if one of us files as HoH.

Thanks.

[Vanessa A]

Since you are still married and would be filing separately, the rule of both either itemizing or taking the standard deduction applies even if you are filing as head of household. If he would choose to itemize, then you would not be able to take the standard deduction.  You would also have to itemize your expenses.  

[Suchin21]

Thanks for your reply. Is it up to who files first or are there rules about who gets to make that decision? In other words, if I file first he would have to do whatever I did, correct? 

[CatinaT1]

It's determined by who files first. If the second filer doesn't use what the other spouse used, the return will be rejected.

[Opus 17]

The IRS rule is:

Persons not eligible for the standard deduction. Your standard deduction is zero and you should itemize any deductions you have if:

• Your filing status is married filing separately, and your spouse itemizes deductions on their return

https://www.irs.gov/pub/irs-pdf/p17.pdf.     page 93

The rule says nothing about how a person filing HOH must claim their deductions.  You are allowed to file HOH and claim any deduction you want, itemized or standard.  His choice has absolutely no effect on you, because you are not filing MFS.  But your choice has an effect on him, because he is filing MFS and is subject to the rule above.    (The application of the rule is different when both spouses file MFS.)

In short: If you itemize, he must itemize.  If you claim the standard deduction, he can do whatever is best for him.  

Secondly, the order of filing has nothing to do with how the rule is applied.  The rule is what is written above.  Order of filing might block someone from e-filing, if there is a conflict with a spouse who filed first.  If that happens, and your return is correct, print and mail the return, and the IRS will straighten it out.   But it doesn't apply in your case.  

[Suchin21]

“The rule says nothing about how a person filing HOH must claim their deductions.  You are allowed to file HOH and claim any deduction you want, itemized or standard...”

This is how I originally interpreted it as well. There is nothing that explicitly addresses this question that I could find. 

Further, if we each file as HoH, each having one of our 2 sons as a qualifying dependent, would we both be able to use either standard deduction or itemize regardless of what the other does?

[Opus 17]

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@Suchin21 wrote:

“The rule says nothing about how a person filing HOH must claim their deductions.  You are allowed to file HOH and claim any deduction you want, itemized or standard...”

This is how I originally interpreted it as well. There is nothing that explicitly addresses this question that I could find. 

Further, if we each file as HoH, each having one of our 2 sons as a qualifying dependent, would we both be able to use either standard deduction or itemize regardless of what the other does?

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If you both file as HOH, your deductions are completely independent from each other.  However, you did say that he did not have a qualifying child, so he would not be eligible to file as HOH.  Even if you use the special rules for children of parents who are divorced or live apart and share custody, you can transfer the $2000 child tax credit but you can't transfer the ability to qualify for HOH.  That depends solely on where the child physically lived in 2024, and can't be shared or transferred.  

You could arrange that for 2025, assuming you were willing to arrange actual physical custody so that child 1 lived in your home at least 183 nights while child 2 lived in his home for at least 183 nights.  It's possible, although it may not be practical.

[Suchin21]

Regarding this:

”Even if you use the special rules for children of parents who are divorced or live apart and share custody, you can transfer the $2000 child tax credit but you can't transfer the ability to qualify for HOH.  That depends solely on where the child physically lived in 2024, and can't be shared or transferred. “

I actually was only asking about the std vs. itemizing deductions question because just this morning a tax accountant suggested I let my ex have one of our sons as a dependent on his tax return to allow him HoH status as well and to take the child credit (it’s only $500 bc our sons are over 17) if I wanted to help him out. She knew both sons live with me. Now I’m confused on that point. 

I did not get a chance to ask the accountant about my deductions question as it was a free consult and we didn’t have a lot of time which is why I asked here.  

[Opus 17]

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@Suchin21 wrote:

Regarding this:

”Even if you use the special rules for children of parents who are divorced or live apart and share custody, you can transfer the $2000 child tax credit but you can't transfer the ability to qualify for HOH.  That depends solely on where the child physically lived in 2024, and can't be shared or transferred. “

I actually was only asking about the std vs. itemizing deductions question because just this morning a tax accountant suggested I let my ex have one of our sons as a dependent on his tax return to allow him HoH status as well and to take the child credit (it’s only $500 bc our sons are over 17) if I wanted to help him out. She knew both sons live with me. Now I’m confused on that point. 

I did not get a chance to ask the accountant about my deductions question as it was a free consult and we didn’t have a lot of time which is why I asked here.  

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Free is worth what you pay for it.  Find a new accountant.  They are ignorant of the law or they are encouraging you and your spouse to commit fraud.

The special rules for children of divorced or separated parents are written down in publication 501.

https://www.irs.gov/forms-pubs/about-publication-501

Trying to keep this brief: The IRS does not follow state court custody orders, the IRS only follows where the child or children physically live.  To claim the child as a qualifying child dependent, the child must physically live in the parent's home at least half the nights of the year (which is 183 or more nights).  Daytime care doesn't count unless one of the parents works nights.  What counts is which parent's home the children sleep at more than half the year.  If that is you for 2024, then you are the only parent who is allowed to claim the children as dependents, including all possible benefits of a dependent (the $2000 child tax credit, EITC, HOH status, and the credit for daycare expenses). 

You can allow the other parent to claim the child as a dependent and get the $2000 child tax credit, by signing a form 8332 releasing the child to the other parent, which form they have to mail with their tax return.  It's a form that says that you agree to not claim the child for the year, and that you agree the other parent can claim the child.  (Or you can give your ex your own letter that says the same thing, but it must be in writing and signed in ink, not a text message or voicemail agreement, because the ex must mail the original signed form or letter to the IRS after they file.)

https://www.irs.gov/forms-pubs/about-form-8332

However, the other tax benefits of a qualifying child dependent (EITC, HOH status, and the credit for daycare expenses) always stay with the parent who has custody more than half the nights of the year, and can't be waived, shared, split or transferred.  The only way for your ex to claim a child as a dependent and get HOH status is to lie and say the child lived in their home more than half the year.   (You would not be actively lying in this case by leaving the child off your return, but you would be facilitating their lie.)

[Suchin21]

thanks for your reply. I just want to do things properly and definitely not lie or commit fraud which is why I’m asking all the questions now. In actuality, I think the accountant I spoke to and I were just on a different page with regard to where my older son lived when home from college. In hindsight, I believe she thought he lived equal days with my ex and me as I did mention he stays with his dad sometimes too. We just didn’t have a long discussion about it.

Thanks for clearing up my confusion.