When your taxes are filed, you need to know what filing status you should use. There are differences between the five different options, and you will choose the one that best benefits you. Make tax time easier and faster by filing correctly. The Big Five The five different status are: single, married, separate married, householder or qualifying widow. If you meet the required criteria in more than one status, you should file using the one that gives you the highest tax benefit.
Single: Usually, if you’re not married, you would file with a single status. It is important to be aware of special circumstances that can affect individuals who file individually. Taxpayers who are legally separated, even if only in December, are considered to be individuals by the IRS. Single, unmarried persons without dependents should apply for this status, but those with dependents should consider their eligibility as head of household. Single consideration also includes divorce and annulment.
Married: married couples may choose to file a single tax return together, or they may file separately using a separate married filing. Legally married couples are only required to be married for a small part of the tax year. Couples whose union is subject to common law can also file as married if their court is recognized by the state. Partners who live separately but are not legally divorced still have to file as married taxpayers most of the time. Married couples who file their revenues jointly on a single return. These types of returns require the signatures of both parties and the couple shares the responsibility for paying the taxes. There are only a few circumstances in which joint responsibility does not affect the couple, such as innocent spousal relief, liability separation (if they have not lived together for the tax year) and fair relief. The primary filer may need to sign the return as a proxy in some cases, but must include a written explanation. This can happen when one spouse is deployed by the army.
Widowed: you are eligible to file married if your spouse died during the tax year and you did not remarry. You can then file as a qualifying widow for the following two years, provided you remain unmarried. Once you remarry, you should file with your current spouse as married. If you remarry the same year your spouse passes, you must file with your deceased spouse separately and with your new spouse a separate return.
The selection of the correct status is an important part of your tax return. This is one of the easy ways to maximize your tax benefit and benefit from all the deductions and credits offered by your ideal status.