The status you use when filing your taxes is one of the most important decisions you will make at tax time. Your filing status determines what benefits you are eligible for, in addition to tax rates and the different amounts you can deduct. Your filing status is determined by your marital status as of December 31st of the tax year, as well as whether or not you have dependents to claim.
Taxpayers who are married as of the final day of the tax year have two choices for filing: Separately or Jointly. If a person lives separately from their spouse and can claim a dependent, there’s a possibility they may qualify to file as Head of Household.
Couples who chose to file together can use the Married, Filing Jointly status and file a single return with both incomes and deductions combined. Filing jointly can save the couple money when they prepare their tax return. Filing separately is an option for couples who are going through a divorce, or for those who need to keep their records and finances separate.
Taxpayers who are not married on December 31st of the tax year will likely file as Single. Those single taxpayers who have a dependent should be aware that they may be entitled to additional benefits if they file using the Head of Household status. Head of Household status typically gives a higher standard deduction and a lower tax rate than the Single status, so it should be considered when applicable to maximize your benefits.
Taxpayers whose spouse passed away during the current tax year should use the Married status, and can chose to file either jointly or separately. If the spouse died within the two years preceding the current tax year, the Qualifying Widow(er) status should be used. This filing status allows you the same conditions as you were entitled to filing jointly during the time you were married.