My husband was laid off at the end of March. He had normally filed our taxes jointly and he had a portion of his income withheld for federal and state taxes. Now, he is working just a part time job. Do I file head of household? My husband is also about to cash out his rertirement. How will all thiis affect our taxes?

ANSWER

The BIDaWIZ Team's Answer:

You cannot file head of household if you are still considered married at the end of the year.  Please note the definition for considered married.  You can however, file married filing separately, but generally that offers less tax benefits than filing jointly. If your husband liquidates his retirement account and is under the age of 59 1/2, he is subject to a 10% early withdrawal penalty, in addition to ordinary income taxes if it is a 401k or traditional IRA.