Guide on Choosing the Tax Filing Status

Dec 24, 2023 By Triston Martin

The first step in completing your federal tax return is determining your filing status. Your filing status determines the standard deduction, tax rates, and tax brackets. Depending on your filing status, your standard deduction and the tax rates and brackets that apply to your income will be determined. As long as you meet the exact qualifying conditions for each tax filing status, you can change your situation each year.



What Is the Meaning of Filing Status?


Declaring whether or not an individual must file taxes is known as saying one's "filing status". Marital status has a significant impact on one's filing status.


Learning About Your File's Status


The filing status is critical since a person's tax bracket (and hence the amount they must pay) is influenced by various circumstances, including whether or not they are married, how many children they have, and what they do for a living.


If you lie on your application, it will be deemed fraudulent, and you will face fines. Taxpayers can be classified into one of five categories.


The Importance of the Filing Status


Additionally, your filing status has an impact on the types and amounts of deductions, credits, and exemptions that you can claim. Be at ease if you're unsure about your standing. It doesn't matter if you're married or single!


Selecting a Tax Filing Status



When preparing your federal income tax return, one of the first considerations you'll have to make is determining your filing status. In addition, you need to be aware of the pros and downsides of each choice because you may have several. Choosing the correct filing status might save you money and avoid future IRS issues.


· Filing Statuses and Their Impact on your Taxes


Depending on your filing status, your tax rate, the amount of your standard deduction, and the sorts of deductions and credits that you can claim are all influenced by your group. You may save money on taxes by filing in the correct status.


Available, married filing jointly, married filing separately, head of household, and qualified widow(er) with the dependent child are the five filing statuses. There are six tax rates to choose from—your tax rate changes according to your filing status and taxable income amount.


Unmarried individuals who earn more than $8,500 but less than $34,500 (in 2011) in taxable income are taxed at 15%.


· Unmarried Person


Fortunately, this one isn't too difficult. And that may be your only choice if your situation warrants it. Your filing status is established at the end of the tax year (December 31). To be eligible for unmarried status, you must be divorced or have a documented separate maintenance decree with your husband on the year's final day. Because of this, if you file as single, you'll be taxed at a greater rate than if you were married.


· Married Couples Typically Save Money By Filing Jointly.


If you and your spouse were married at the end of the tax year, you could file jointly.


  • Married and cohabiting as a couple
  • Married but not divorced or in a separate maintenance arrangement although living apart
  • Separated by an interim (non-final) divorce decree


As a result, even if your spouse died during the tax year, you are still deemed married regarding filing status.


Your income, deductions, and credits are combined when you and your spouse file as a married couple. Filing jointly usually results in the most significant tax savings for married couples. Many credits are available to married couples who file a combined return but not to couples who file a separate return.


From 2009 to 2012, the American Opportunity Credit (formerly known as the Hope credit) was renamed the American Opportunity credit and the Lifetime Learning credit was added.


· You Do Not Have To Be Divorced To File Separately


If you and your spouse were married on the final day of the tax year, you could choose to file separately. Only your earnings would be reported, and only your deductions and credits would be claimed. If you wish to be solely responsible for your taxes, you may want to consider filing a separate return.


In contrast, each spouse is jointly and severally liable for the whole tax bill while filing a combined return. It means that if your spouse leaves town, you'll be on the hook for taxes unless you qualify as an innocent spouse.


If one spouse has a lot of medical expenses or other itemized deductions, filing may be the best option. The amount of these deductions you can claim depends on your taxable income after tax adjustments (AGI).


· Head of the Household Status Has Several Tax Benefits


The head of household filing position affords favorable tax benefits to those who meet the requirements. In addition to reduced tax rates and a more significant standard deduction for head of household filers, the standard deduction is also larger for married couples filing separately. You must, however, meet the following conditions:


  • After the year, you should be unmarried (unless you live apart from your spouse and meet specific tests)
  • For your kid, dependent parent, or another eligible dependent relative, you must maintain a home in which you live.
  • To be eligible for benefits, the residence you live in must also be the primary residence of a qualified relative for at least half of the year.
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