For those who are unfamiliar with filing taxes, knowing which tax status to file can be an important factor in how your taxes turn out.
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Do you know which tax status to file?
For those who are unfamiliar with filing taxes, knowing which tax status to file can be an important factor in how your taxes turn out. Some people fit under more than one tax status but, since they can only file one way, it then becomes necessary to figure out which status would benefit them the most. There are several different situations people can find themselves in which make determining their status difficult.
One tax status classification is single. While this status may seem self-explanatory, various situations can qualify people for this status who weren't actually single for the entire previous year. For instance, people who were separated (legally) just the last few weeks of the previous year are allowed to claim that they were single the entire year. Of course, people who are unmarried and childless certainly qualify for this status. People who obtained divorces or annulments during the previous year may claim that they were single the entire year.
Single people who have eligible children or dependents will not file single. They will need to file Head of Household. Widowed people with eligible children or dependents should not file single, either, but will file as widow with eligible children or dependents.
The married tax status is a little more complicated than it sounds. Of course, if you have been legally wed and are living with your spouse, you will file married. This applies whether you were married the entire previous year or not. People who are not wed but are staying together in the same house are considered common law spouses only if the state they reside in recognizes common law marriages. If so, they may file under the married status. If you are married to someone but not living with them and are not divorced or legally separated yet, then you may still use the married status when filing taxes. If you were married and your spouse died the previous year, you may still file under the married status. If you do not remarry, you will need to file under the widowed with eligible dependents for two years afterward (if you have minor children).
The married tax status gives you the option of filing jointly or separately. If you choose to file jointly with your spouse, then both of your incomes will be listed on one return. Both of you will need to endorse and date this type of return together. You will share with your spouse equally the responsibility of all of the information contained in the return, any money owed out in taxes, and all money received from the return.
Married people also may decide to file separately. This option allows them to file their own returns with their own income and individual expenses being reported. Expenses may not be duplicated, however, on the other's return so you must determine which spouse will claim which expenses.
Now you should have a better idea of which tax status you fit into and which one you should use to file your tax return. There are some other exceptions not listed here but these are the most common ones. For more information, you may consult with the IRS's website or your financial advisor.
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