Choosing The Correct Filing Status for Your Tax Return
Your federal tax filing status (Single, Married Filing Jointly, Head of Household, etc.) can affect the amount of your standard or itemized deductions, your eligibility for tax credits, and your tax rate. Correctly identifying your filing status is one of the most critical tax decisions to make each year.
THE PRINCIPAL IRS DESIGNATIONS ARE :
- SINGLE: This designation applies to most unmarried taxpayers, including those who are divorced or legally separated according to their state’s laws.
- MARRIED FILING JOINTLY: Under this designation, a married couple can file a single tax return that covers both spouses.
- MARRIED FILING SEPARATELY: Married couples may choose to file separate returns. While filing jointly offers tax benefits in many cases, some couples may lower their total tax by filing separately.
- HEAD OF HOUSEHOLD: Unmarried taxpayers who pay more than half the cost of maintaining a home for themselves and a qualifying individual (such as a dependent child) may qualify to claim this status. Heads of Household get a higher standard deduction and higher income limits for certain credits and deductions than Single filers
- QUALIFYING WIDOW(ER) WITH DEPENDENT CHILD: Taxpayers whose spouses passed away within the last two years may qualify for this special filing status if they have one or more dependent children.
Note that under IRS rules, your status as either single or married as of December 31st usually determines your filing status options for the entire year. For example, if you were single for nearly all of 2020 but got married on December 30th, you most likely need to choose either Married Filing Jointly or Married Filing Separately as your filing designation for the year. One important exception to this rule is that a widowed spouse may typically file a joint return for the year in which the other spouse passed away.
The IRS now offers an interactive “What Is My Filing Status?” tool (link below) to help you determine the appropriate choice for you. Taxpayers who qualify for multiple designations are free to choose whichever status results in the lowest tax. If you are unsure which filing status is most advantageous for you, a professional tax advisor can help you make this determination.
IRS “What Is My Filing Status?” Tool: https://www.irs.gov/help/ita/what-is-my-filing-status
Separately as your filing designation for the year. One important exception to this rule is that a widowed spouse may typically file a joint return for the year in which the other spouse passed away.
The IRS now offers an interactive “What Is My Filing Status?” tool (link below) to help you determine the appropriate choice for you. Taxpayers who qualify for multiple designations are free to choose whichever status results in the lowest tax. If you are unsure which filing status is most advantageous for you, a professional tax advisor can help you make this determination. For questions regarding your filing, IRS has a “What Is My Filing Status?” Tool: https://www.irs.gov/help/ita/what-is-my-filing-status
RTW will help you determine your filing status and file your taxes remotely from the comfort of your own home or you may come into the office!
