When the time comes to file your taxes, you’ll need to know which filing status you should use. There are differences between the five different options, and you’ll want to choose the one that gives you the greatest benefit. Make tax time easier and quicker by filing with the right status.
The Big Five
The five different statuses are: single, married filing jointly, married filing separately, head of household, or qualifying widow(er). If there is more than one status in which you meet the required criteria, you should file using the one that gives you the highest tax benefit.
Single: If you aren’t married, usually you’d file using the single status. It’s important to be aware of special circumstances that can affect those who file single. Taxpayers who are legally separated, even if only for the month of December, are considered single by the IRS. Single, unmarried individuals with no dependents should file using this status, however those with dependents should consider their eligibility for Head of Household. Divorce and annulment also counts towards single consideration.
Married: Married couples can chose to file a single tax return together, or they can file individually, using married filing separately status. Legally married couples are only required to live together for a small part of the tax year to file as married. Couples whose union falls under common law practices can also file as married provided their courtship is legally recognized by the state. Most of the time, partners who live separately, but aren’t legally divorced, are still required to file as a married taxpayer. Married couples who file jointly process both of their incomes on a single return. These types of returns require signatures from both parties, and the responsibility of tax payment is shared by the couple. Only a few circumstances exist where joint responsibility would not affect the couple, such as innocent spouse relief, separation of liability (if they haven’t lived together for the tax year), and equitable relief. In some cases, the primary filer may have to sign the return as a proxy, but will need to include written explanation. This can occur is one spouse is deployed by the military.
Widowed: if your spouse passed away during the tax year and you did not remarry, you are eligible to file married, jointly. Then for the following two years, you can file as a qualifying widow(er) provided you remain unmarried. Once you remarry, you should file as married with your current spouse. If you remarry the same year that your spouse passes away, you will have to file married, separately with your deceased spouse and a separate return with your new spouse.
Choosing the right status is an important part of filing your tax return. It’s one of the easy ways to maximize your tax benefit and take advantage of all the deductions and credits your ideal status offers.