Choosing the correct filing status can not only affect your tax liability but also any credit you may be entitled to at tax time. Some filing status may also determine if you even have to file taxes for the year.
According to the IRS, anyone that married before December 31st of the tax year is considered married for the full year. There are special rules for same-sex marriages. If the location you were married recognizes same-sex marriages, the IRS allows you to file your taxes under married status regardless of whether the law where you reside recognizes same sex marriage.
If you can choose more than one filing status you should choose the option that will give you the lowest tax liability. There are five different status, outlined below:
Single – If you are not married legally, are divorced or separated as seen by your current state laws this is the filing status you must choose.
Married Filing Jointly – A married couple uses one tax return to file the current year’s taxes together. If your spouse passes away during the tax year, you are still eligible to file jointly. After the first year filed jointly the surviving spouse may choose to file as Widow(er) status for the following two years.
Married Filing Separately – A married couple can decide to file separate returns. In some cases this can lower your tax liability. This also allows for couples to have liability over their own tax returns.
Head of Household – If you are not married and have a qualifying dependent this status may apply to you. You will have to have paid over 50% of the living expenses for yourself and the dependent. It’s important to understand if this status pertains to you as it is often misused.
Qualifying Widow(er) with Dependent Child – This status can apply to anyone who has lost a spouse within the last two tax years, there are other conditions of filing with this status. For the current tax year your spouse must have passed in 2013 or 2014 to be eligible.