People dread doing their taxes for good reason: The rules are complex. The process is loaded with potential pitfalls. And the penalties resulting from errors can be scary. Even something that seems as simple as selecting the right filing status can be fraught with complications. But fear not – the Internal Revenue Service will let you know if you make a mistake. And the IRS is not without mercy. If you incorrectly claim head-of-household filing status, the ultimate outcome can be as painless as paying some additional tax dollars and interest.
Penalty for Filing Incorrectly
The IRS indicates that it will probably take about a month to review your matter after it questions your filing status. If you can prove that you do indeed qualify as head of household, you’ll then receive a notice that effectively says, “OK. Your case is closed.”
Otherwise, if you don’t respond or if your proof is insufficient, you’ll receive an audit report. The report will tell you how the IRS intends to change your return, usually by changing your filing status to single, along with the correct tax amount you actually owe when this change is made. The penalty for filing the wrong status can include the additional tax owed as well as interest because technically, your payment is late because you didn’t submit the correct amount the first time. You can accept this verdict and send off the payment, or you can engage in a full-fledged audit to try to prove to the IRS that it’s wrong.
What Happens If You Get It Wrong?
If the IRS suspects that you don’t meet all these rules, and you filed a fraudulent tax return it will notify you by mail. The IRS will not call you out of the blue and it won’t send you an email. If you’re contacted in either of these ways, it’s most likely a scam.
But how would the IRS know that you don’t qualify as head of household? Because it possesses a wealth of knowledge accumulated from your previous years’ tax returns and others’ tax returns as well. All this is stored in its computer system and a flag will go up if something doesn’t seem right. You and your ex might have both tried to claim the same child as a dependent, or two people living at the same address might both have claimed that they paid most of the expenses.
You’ll most likely receive Notice CP85A questioning your filing status, particularly if you tried to claim the earned income tax credit as well. Otherwise, you might receive Notice CP75A, CP75C or CP75D questioning the dependent you claimed or some other issue that would affect your right to file as head of household. All these letters should tell you what type of supporting documentation the IRS wants.
You Must Be “Considered Unmarried”
The rules for qualifying as head of household are as complex as any in the tax code so it’s easy to make a mistake here. First, you must be unmarried or “considered” unmarried on the last day of the tax year, and this isn’t as black and white as it might sound.
You can still be legally married to your spouse and be considered unmarried if the two of you have not lived together at any time during the last six months of the year. Technically, you might still have the option of filing a joint married return in this situation, but the qualifying rules for head-of-household status forbid this. You can’t claim head of household unless you file a separate tax return.
If you were never married or you’re legally divorced, you obviously meet the “considered unmarried” rule. Special rules apply if your spouse is a nonresident alien. Check with a tax professional if you’re in this situation because even more complicated rules apply.
For head-of-household status, you must also pay for more than half the cost of maintaining your home throughout the year, but you can’t count any and all expenses when you’re calculating this. You can include the interest you pay on a mortgage and property taxes, but not the portion of your mortgage payments that represent the principal. You can include your entire rent payment if you lease, and utilities and groceries count. Things like clothing, medical bills, insurance, and entertainment do not count.
Additionally, you must have a qualifying dependent who lived in your home for more than half the year. This can be your child, stepchild, foster child or even a sibling or grandchild. The child must be younger than you, younger than age 19, or younger than age 24 if she’s a full-time student. She cannot have paid for more than half her own support.
You can also qualify as head of household if you have an adult dependent such as your parent, and your parent does not have to live with you if you pay at least half the cost of maintaining his residence.
What To Do
Provide the documents the IRS tells you to provide if you believe you qualify as head of household. This might include school records showing that your child’s address is the same as your own, or copies of leases or mortgage documents that show you and your ex had separate residences during the second half of the year. Don’t send the originals. Submit copies.
IRS Form 886-H-HOH lists the various types of documentation you can use to prove you qualify as head of household.
If you haven’t yet received a notice but you know you goofed, you can file an amended tax return using the correct filing status. Just be sure to remit any additional tax that’s owed, which will probably be the case because filing as head of household offers several tax breaks.
- H&R Block: I Filed Taxes Wrong
- IRS: Publication 504 (2017), Divorced or Separated Individuals
- H&R Block: IRS Notice CP85A – Please Help Us Confirm Your Filing Status
- IRS: Topic Number 654 - Understanding Your CP75 or CP75A Notice Request for Supporting Documentation
- IRS: Head of Household
- IRS: Filing Status 2
- eFile: IRS Head of Household Filing Status
Beverly Bird has been writing professionally for over 30 years. She specializes in personal finance and w, bankruptcy, and she writes as the tax expert for The Balance.