Couples who file their tax return together, aka married filing jointly status, commonly get the best rate of taxation, along with taxpayers who qualify to file using the qualifying widow(er) status, as they get similar rates as married taxpayers. Using the status married, filing separately have the highest rates of taxation, generally, though using the status may be worthwhile depending on your individual situation. You should check your return using both statues if you are married to see which nets you the best savings.
Just because you aren’t married doesn’t immediately mean you have to file using the single status. If you have dependent children, head of household may be the best option, as it offers better tax rates than the single status, as it accounts for the children in your home which you have to provide for.
If you’re married, you may still have the capacity to file as head of household. To do so, you’ll need to have lived with your dependent child in a residence that is completely separate from that of your spouse’s for at least the final six months of the year. While you’re not eligible to file jointly, but are still married, you’ll get a better tax rate if you can use HOH status over married, filing singly.
Those who have had their spouse pass away in the two years prior to this tax year may file qualifying widow(er) if they have a dependent child and have maintained a household. This allows the widow(er) to get the same rates as a couple who files jointly.
Regular income, such as compensation and interest, is taxed at a range between 10% and 39.6%, and is subject to the total amount of taxable income you have. Dividends and net capital gains are liable to rates of 0%, 15%, 20%, 25%, or 28%, which is dictated by which asset is sold and the remaining income. These rates are ordinarily lower than those for regular income. Contingent upon what your top bracket rate is for your income, your rate for qualified dividends and capital gains ranges somewhere around 0% and 20%.