Choosing the Right Filing Status
There are 5 filing statuses listed on the Federal individual income tax return. Each year, you must indicate which filing status you are using.
What Are Your Filing Status Options?
There are 5 options for filing status:
• Married Filing Jointly
• Married Filing Separately
• Head of Household
• Qualifying Widow/Widower
You should check the box next to your filing status, listed on Lines 1-5 of Form 1040 and Form 1040A.
Which Filing Status Should You Choose?
You must use the filing status that you qualify for. If you qualify for more than one filing status, you should choose the status that results in the lowest amount of tax. In most cases, your filing status depends on your marital status as of the last day of the tax year (December 31st).
When choosing your filing status, remember that you must consider your Federal tax return as well as your State tax return (for most people). Many states require that you use the same filing status on both returns.
If you are unmarried and you have no dependents, your filing status is “single.”
If you got divorced during the year, your divorce must be finalized by December 31 in order to use the “single” filing status. Otherwise, you are considered “married” for income tax purposes.
Married Filing Jointly vs. Separately
If you are married, you can choose to file a joint tax return or file separate tax returns. Note that most married couples file jointly, because filing separately limits your eligibility for certain tax breaks (such as the Earned Income Tax Credit).
When Would Married Couples Want to File Separate Returns?
There are a few instances where it makes more sense to file separate tax returns. This often occurs when a married couple has medical expenses or miscellaneous deductions that are only attributable to one spouse. For these types of deductions, you can only deduct the portion that exceeds a percentage of your Adjusted Gross Income (AGI) — 9.5% for medical expenses and 2% for miscellaneous expenses. If a couple files separately, the spouse with expenses can get a bigger tax deduction because only one person’s income is reported on their return.
In other cases, a couple may simply want to keep their finance separate. Or perhaps they don’t want one spouse to be responsible for the other spouse’s tax situation. Whatever your reason, filing separate tax returns is an option.
It’s important to remember that married couples filing separately must both agree on whether to claim the standard deduction or itemize deductions. In general, you cannot claim the standard deduction if your spouse itemizes deductions, and vice versa.
Same-Sex Couples and Tax Returns
You were married in a state that recognizes same-sex marriage, you are considered “married” for Federal income tax purposes. This is true even if the state where you currently live does not recognize your marriage.
Head of Household
If you are unmarried and you have any dependents, you may be eligible to file as “head of household.” Filing as “head of household” can have a number of benefits, including a higher standard deduction and lower tax rates.
To qualify as “head of household,” you must pay over half the cost of maintaining your home and have a qualified dependent who lives with you for more than half the year. The rules for eligibility can be tricky, so make sure that you qualify before using this filing status.
You may be able to file as “qualifying widow/widower” if your spouse passed away sometime during the previous two years, you have not remarried, and you have a dependent at home. Note that the rules for having a qualified dependent are similar to the rules for “head of household.” Make sure you understand the eligibility requirements or consult a tax professional before you use this filing status.
For more information, please see IRS Publication 501 (Exemptions, Standard Deduction, and Filing Information).