Separated (not legally) Filing status

[studgard]

Spouse A lives in a low income housing with 2 children for the whole year.

Spouse B has more income, lives in the same state, provides monthly unofficial "child support".

The "child support" is counted as income for spouse A  for the housing purposes.

Spouse A is planning to file head of household while Spouse B is filing married separately if joint filing is against the low income housing rules.

Joint filing has been the best option for credits and lower tax burden. Would it jeopardize the low income housing eligibility?

TIA.

[xmasbaby0]

We are here to answer income tax questions and questions about the tax preparation software.   We cannot speculate or answer your questions about the housing rules.   

As for the parent who has the children----the parent who the children lived with may be the one who can file as head of household.   Did they live apart for at least the last six months of the tax year?  

Am I Head of Household?

https://ttlc.intuit.com/questions/1894553-do-i-qualify-for-head-of-household

https://ttlc.intuit.com/questions/2900097-what-is-a-qualifying-person-for-head-of-household

If you qualify as Head of Household, when you enter your marital status (single or married filing separately) into MyInfo, and then enter your qualifying dependent, TurboTax will offer HOH as your filing status.

[xmasbaby0]

Spouses A and B can choose to file a joint return if they both agree to file that way.   Whether it impacts the housing situation for the lower income spouse is a question for the housing authority, not TurboTax.

If you were legally married at the end of 2022 your filing choices are married filing jointly or married filing separately.

Married Filing Jointly is usually better, even if one spouse had little or no income. When you file a joint return, you and your spouse will get the married filing jointly standard deduction of $25,900 (+$1400 for each spouse 65 or older)  You are eligible for more credits including education credits, earned income credit, child and dependent care credit, and a larger income limit to receive the child tax credit. 

If you choose to file married filing separately, both spouses have to file the same way—either you both itemize or you both use standard deduction. Your tax rate will be higher than on a joint return. Some of the special rules for filing separately include: you cannot get earned income credit, education credits, adoption credits, or deductions for student loan interest. A higher percent of your Social Security benefits may be taxable. Your limit for SALT (state and local taxes and sales tax) will be only $5000 per spouse. In many cases you will not be able to take the child and dependent care credit. The amount you can contribute to a retirement account will be affected. If you live in a community property state, you will be required to provide additional information regarding your spouse’s income. ( Community property states:  AZ, CA, ID, LA, NV, NM, TX, WA, WI)

 If  you are using online TurboTax to prepare your returns, you will need to prepare two separate returns and pay twice.

https://ttlc.intuit.com/questions/1894449-married-filing-jointly-vs-married-filing-separately

https://ttlc.intuit.com/questions/1901162-married-filing-separately-in-community-property-states

https://ttlc.intuit.com/questions/1894449-is-it-better-for-a-married-couple-to-file-jointly-or-separ...

[rjs]

There is a subtle twist in the rule about the standard deduction. The restriction on using the standard deduction applies only to someone whose filing status is married filing separately. If one spouse files as head of household and the other files as married filing separately, the restriction on using the standard deduction applies only to the spouse who files as married filing separately. It does not affect the spouse who files as head of household.

Suppose Spouse A files as head of household and Spouse B files as married filing separately. Spouse A can either itemize deductions or use the standard deduction, no matter what Spouse B does. If Spouse A itemizes deductions, Spouse B cannot use the standard deduction, so effectively Spouse B has to itemize (or claim no deductions at all). If Spouse B itemizes deductions, Spouse A can still use the standard deduction for head of household.