Choosing the Correct Filing Status

Believe it or not, something as simple as your filing status determines your filing requirements, standard deduction, tax credit eligibility, and your overall tax. Each tax year has a standard deduction based off of your filing status which is adjusted annually due to inflation.

There are five filing statuses:

• Single
• Married filing jointly
• Married filing separately
• Head of Household
• Widower

Single:

If you are unmarried and do not have any dependents, you file as single.

Married:

According to the IRS, if you are married on any day of the tax year, even the last day of the year, you are considered to be married for the entire tax year. This means you must file either married filing jointly with your spouse, or married filing separately.

Head of Household:

If a taxpayer is filing as head of household, they must meet certain requirements. You must be able to pay for more than half of the household expenses, are unmarried for the tax year, and have a qualifying child or dependent.

Qualifying Widower:

In order to use the qualifying widower status, certian requirements must be met. A taxpayer must have filed married filing jointly for the tax year of their spouse’s death. After that tax year, they can file as a qualifying widower for two years following their spouse’s death. To do so, they must not have remarried, must have a qualifying dependent that lived with them for the entire year, and paid for more than half the cost of maintaining their home.

You can also click here to use the IRS tool to determine your filing status.

This entry was posted on Monday, November 2nd, 2020 at 8:44 pm and is filed under Credits, Deductions, Personal Information. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.