Personal Finance & Money Asked on January 9, 2021
I’m recently engaged, which is good. But this presents a quandry.
I make 100% of the money for our household, and we’ve been living together for nearly 2 years now. Tax wise, this kind of sucks. My fiancé last year filed a tax return for $0, and I filed one for much more. Both were filed as single.
I did some math and it looks like we could save something like $6000 in federal income tax if we filed jointly, but rushing to the courthouse to squeeze in a sad ceremony before the years end for a tax status is terribly unromantic…
I also looked at head of household, but if I understand that one correctly it’s just the two of us in this house and my partner would not be a qualifying dependent because they are not a child or relative.
Is it possible to have a tax status that recognizes that my income supports two people, without attempting to rush a legal marriage status in the middle of a pandemic?
In some situations, there are tax benefits to being married, and in others, there is a marriage penalty.
In a case like yours, where one partner makes all the money, and the other has no income, marriage mostly provides tax savings.
You can file as "Married" if you are married at the end of the year. So yes, if you did manage to get married before the end of the year, you would likely see tax savings on your 2020 tax return.
There are only five filing statuses. As you noticed, "Head of Household" does not apply to you, because your girlfriend does not count as a qualifying relative for Head of Household status.* The only status that you can choose before you get married is "Single."
Despite the fact that she is not a Qualifying Relative for HOH status, she might be considered a dependent for the purposes of the Credit for Other Dependents. The tax credit is only $500 if you qualify, but that is better than nothing.
My advice to you is to do what is best for your relationship. Your relationship is worth more than any tax savings. But of course, if you and your partner want to get married before the end of the year, the tax savings would be nice.
* IRS Publication 501's Table 4 defines who qualifies as a "Head of Household" dependent. Your girlfriend is not on the list of qualifying relationships for this. Example 3 on this explanation for Qualifying Person agrees with this assessment:
Example 3—girlfriend. Your girlfriend lived with you all year. Even though she may be your qualifying relative if the gross income and support tests (explained later) are met, she isn't your qualifying person for head of household purposes because she isn't related to you in one of the ways listed under Relatives who don't have to live with you. See Table 4.
Correct answer by Ben Miller - Remember Monica on January 9, 2021
At least at the federal level, "single" and "head of household" are your two options.
I would reconsider whether having a quicky ceremony now would lessen your enjoyment of a proper wedding at a time of your choosing (especially since $6000 can go a long ways toward paying for that wedding, too.)
Answered by chepner on January 9, 2021
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