When you fill out your income tax return, you must indicate on the form what your filing status is. There are five filing status options, based on marital status and other requirements.
The following filing statuses are recognized by the IRS and must be reported on your personal income tax return (Form 1040). Review each status carefully, as one may offer you more tax benefits than another, depending on your specific situation.
A taxpayer may file as “single” is he/she is unmarried, divorced, legally separated, or widowed as of the last day of the calendar year (December 31st). Individuals who have dependents, but who were not the primary caregiver for more than half of the year, must also use this filing status. The IRS generally requires taxpayers to file as “single” if they do not meet the criteria for the other filing statuses.
Married Filing Jointly
Married couples who file under this status must turn one shared/combined tax return and jointly take responsibility for the income reported and taxes owed. To qualify, the couple must be legally married as of the last day of the applicable tax year. Widow(er)s whose spouse died in the past did and who did not remarry may also use this status. The majority of couples file jointly because it offers them more benefits, such as lower tax liability, than if they had filed separately.
Married Filing Separately
Married couples who files under this status generally have separate high income and/or large itemized deductions (e.g., from charitable contributions or medical expenses). However, if a couple files separately and one spouse itemizes deductions, the other spouse cannot claim the standard deduction. Also, certain tax breaks (such as student loan deductions and child tax credits) cannot be claimed, or are reduced, for separate filers. In terms of tax benefits, this status is usually considered less advantageous because it can result in a higher overall tax for a married couple. It is highly recommended that spouses compute their tax liability under both “joint” and “separate” statuses to see which will work best for them.
Head of Household
A taxpayer may file as “head of household” if he/she is unmarried as of the last day of the year (December 31st). To qualify, the head of household must also be paying for over half the costs of maintain his/her home and have a qualifying dependent (e.g., child or relative) who has lived in the home with them for at least 6 months ― special exceptions may apply to dependent parents). This status is generally used by single parents who have custody of their children. Head of household offers more benefits than the “single” or “married filing separately” statuses, including lower tax rates and higher standard deductions.
Qualifying Widow/Widower with Dependent Child
This status can only be used by a widow(er) who lives with a dependent child and has not remarried. It may apply for the year in which their spouse passed away, and it can be used for up to 2 years after their spouse’s death. A qualifying widow(er) must have been entitled to file a joint return with their spouse in the year that he/she passed, regardless of whether that return was actually filed. This filing status allows individuals to use the same tax rates as those who are “married filing jointly” as well as the highest standard deduction (provided they do not itemize deductions).
What to Know About Tax Filing Statuses
The IRS gives 8 important facts about filing statuses. These will help you choose the best status option for your particular situation.
Fact #1: Your marital status on the last day of the year determines your marital status for the entire year, for tax purposes.
Fact #2: If more than 1 filing status applies to you, you may choose the one that gives you the lowest amount of tax due.
Fact #3: The “Single” filing status generally applies to anyone who is unmarried, divorced, or legally separated according to state law.
Fact #4: A married couple may file a joint tax return together. The couple’s filing status would be “Married Filing Jointly.”
Fact #5: If your spouse passed away and you did not remarry during that year, usually you may still file a joint tax return with that spouse for the year of death.
Fact #6: A married couple may elect to file their tax returns separately. Each person’s filing status would generally be “Married Filing Separately.”
Fact #7: The “Head of Household” status generally applies to taxpayers who are unmarried. You must also have paid more than half the cost of maintaining a home for you and a qualifying person to be able to use this filing status.
Fact #8: You may be able to choose “Qualifying Widow(er) with Dependent Child” as your filing status if your spouse died within the past two years, you have a dependent child, and you meet certain other conditions.