Some taxpayers are eligible for more than one status for income tax purposes, and as they prepare for the upcoming filing season they should carefully review their options to choose the status that makes the most sense for them. Those who are only eligible for one status should review their situation after a major life event, such as marriage or divorce.
Status for income tax purposes is important because it affects:
- Whether the taxpayer is required to file a federal tax return
- The type of declaration form the taxpayer must use
- Whether they must file an income tax return to receive a refund
- Your standard deduction value
- Whether they can claim certain credits
- The amount of tax they must pay
Below are the five existing statuses for income tax preparation purposes:
- Single. Typically, this status is for taxpayers who are single, divorced or legally separated by divorce or separate maintenance decree governed by state law.
- Married Filing Jointly. If the taxpayer is married, he/she can file a joint income tax return with his/her spouse. When one spouse passes away, the widowed spouse can usually file a joint return for that year.
- Married Filing Separately. Married couples can choose to file separate tax returns. Doing so may in some cases result in less tax due than filing a joint tax return.
- Head of Household. Single taxpayers can declare using this status, but special rules apply. For example, the taxpayer must have paid more than half of the cost of maintaining a home for themselves and a qualified person living in the home for at least 06 months during the year. (valid for separated mothers or fathers living with their children).
- Qualified widow(er) with dependent child. This status may apply to a taxpayer if their spouse died during one of the previous two years and they have a dependent child. Other conditions also apply.
What is my status for income tax purposes?
If taxpayers are confused about their status, they can use section What Is My Filing Status? | Internal Revenue Service (irs.gov). IRS Interactive Tax Assistant tool. This tool can also help taxpayers eligible for more than one status find the one that will result in the lowest tax amount.
Still have questions about your case, contact us today.
Credits: IRS Tax Tip 2022-182
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Is it better for couples to file their tax returns jointly in some states and separately in others?
Hi Rafael, when a couple residing in the US file jointly, the income tax table is more favorable for them, and in most cases it is worthwhile for married couples to file jointly, however, we always analyze the client's documents to determine what best applies to their specific case.