Well, it’s here again. Another tax season is upon us and millions of people are preparing to go through the often complicated filing process. One of the common questions asked concerns how you determine your tax filing status. It is important to figure out what your correct filing status so you can sure that your taxes have been prepared properly. As you will see there are five different tax filing statuses. Each one represents different circumstances.
One thing I learned that it's not sometimes always black and white. Just because you're married, doesn't mean that it always makes sense to file Married Filing Jointly. It's always best to meet with a tax professional to educate you on the different options.
The Right Filing Status
It is crucial that you understand these different statuses. Hopefully, I can give you a basic primer so you know what you need in order to file your taxes correctly and understand what you can legally claim. Another point is that the status you choose will be based on your circumstances as of the last day of the year prior to filing, meaning December 31.
One caveat though: While this information does give you an overview of official filing statuses, you should keep in mind that the tax laws change every year. This makes it a good idea to consult a professional tax prepared or discuss the matter with an IRS agent if need be. <<<Notice, I mentioned it again. Yes, it's that important.
More from GFC, Below
What’s Your Status
- Married filing jointly: This is most common and beneficial status to choose when you are married. Even if you did not get married until the last day of December, you can still file married filing jointly (MFJ).
- Married filing single: Often, it is more beneficial for a married couple to file separately if one of the partners is self-employed and making significantly less money or if the other has more investments. Then again, you might file this status if you lived apart from your spouse during a given tax year. It is abbreviated MFS on some forms.
- Head of household: This status is a tricky one, especially when you know how often it has been improperly claimed. This means that if you want to file using this status you need to provide proper documentation. You can only claim head of household when you’re a single taxpayer, legally separated, or when your spouse didn’t live with you during the second half of the tax year. Plus, you qualify if you have a qualifying child or relative and you paid over half the child’s support. If you’re married or the spouse presumably spent even a one night in the same residence, then you do not qualify.
- Single: This is pretty straightforward. You can claim it if you’re not married as of the December 31 of the tax year or legally separated.
- Qualifying Widow(er): You can claim this tax filing status if your spouse passed away during the last tax year or the one prior to that and you have a child that qualifies. Qualifying Widow(er) offers the same benefits as married filing jointly.
Additional Factors for Tax Filing
One other thing to consider: It may be helpful to prepare your taxes both ways, meaning MFJ and MFS, just to see which option provides the greater tax benefits. Keep in mind that when you’re filing married filing single, and you’re filing a schedule A form, both parties must file on this schedule. If you're still confused, please notes above about seeking a professional to help you out.