Filing Status

The five statuses

Single. Unmarried, no dependents requiring Head of Household treatment. The narrowest brackets and smallest standard deduction.

Married Filing Jointly (MFJ). You and your spouse file one combined return. Brackets are roughly double those for single, and the standard deduction is $32,200 (2026). Best option for most married couples.

Married Filing Separately (MFS). You and your spouse file separate returns. Brackets mostly mirror single, but many deductions and credits are reduced, eliminated, or require both spouses to file consistently. Usually worse than MFJ.

Head of Household (HoH). Unmarried (or "considered unmarried"), paid more than half the cost of keeping up a home, and have a qualifying child or relative living with you more than half the year. Brackets are between single and MFJ; standard deduction is $24,150 (2026).

Qualifying Surviving Spouse (QSS). In the year your spouse dies, you file MFJ. For the following two years, if you have a dependent child, you can use QSS status, which keeps MFJ brackets and standard deduction.

MFJ vs MFS for married couples

Most married couples benefit from filing jointly. Many credits and deductions are unavailable or limited for MFS filers:

• Student loan interest deduction: not allowed for MFS.
• IRA contribution deduction: severely restricted for MFS.
• Education credits: not allowed for MFS.
• Earned Income Tax Credit: not allowed for MFS.
• Child and Dependent Care Credit: not allowed for MFS in most cases.
• Traditional IRA deduction phase-out for MFS: $0–$10,000 (extremely narrow).

When MFS might make sense:

• Student loan repayment under IDR plans. IDR plan payments are often based only on the individual spouse's income when filing separately, which can substantially reduce monthly payments.
• Liability concerns. If you don't want to be jointly liable for your spouse's tax (common in divorce proceedings), MFS keeps each person's obligation separate.
• Extremely uneven income with large itemized deductions. Rare, but possible when one spouse has massive deductions and the other has little income.
• Community property states. Special rules apply, making MFS more complicated but sometimes advantageous.

The right approach if you're unsure: tax software can easily file both ways and show the difference. Usually MFJ wins by thousands.

Head of Household qualifying

HoH has strict requirements:

• Unmarried (or considered unmarried per IRS rules — still legally married but living apart for the last 6 months of the year and maintaining a home for a qualifying child).
• Paid more than half the cost of keeping up a home for the year. Includes rent, mortgage interest, property tax, utilities, repairs, food consumed in the home.
• A qualifying child or qualifying relative lived with you for more than half the year (exceptions for non-custodial parents with specific agreements).

HoH vs Single is a meaningful difference:

An HoH filer at $50,000 taxable income pays meaningfully less tax than a Single filer at the same income.

Filing status timing

Your filing status is determined by your marital status on December 31 of the tax year. Marry on December 30 and you file MFJ (or MFS) for the whole year. Divorce finalized on December 30 and you file Single (or HoH) for the whole year.

This creates planning opportunities around year-end life events.

The "marriage penalty" and "marriage bonus"

The U.S. tax code produces both:

• Marriage bonus when two unequal-earner spouses marry. Combined income is lower than two single incomes plus MFJ's wider brackets create a tax reduction.
• Marriage penalty at very high incomes where MFJ brackets don't quite double. Two high-earning professionals may pay slightly more combined after marriage than they did separately.

For most couples, the net is a small bonus or rough neutrality.

How Horizons uses this

Horizons uses your filing status to drive the default tax rates and brackets in your forecast. If you change status mid-forecast (marriage, divorce, spouse passing), you can set the transition at the appropriate month and the engine will shift rates from that point forward.