Filing status is a category that defines the type of tax return form a taxpayer must use when filing his or her taxes. It is closely tied to marital status.
Filing status is important because a person’s tax bracket is determined by marital status, a number of children, occupation, and several other factors. You must file your status honestly, or it will be considered fraudulent and penalties will be assessed.
For federal income tax purposes, a taxpayer falls into one of five categories. Those are single, married filing jointly, married filing separately, head of household, and qualifying widow(er) with dependent children.
The single filing status is used by people who are unmarried on the last day of the year. Single taxpayers who can claim a dependent may be eligible for the Head of Household filing status, which will provide more tax benefits.
Head of Household (HOH) –
Filing status – If you are single and have been taking care of a dependent for more than six months, you may be eligible for the Head of Household filing status (HOH). This filing status benefits from a higher standard deduction and lower tax rates than those who are just “single” filers. The criteria are strict, as only certain types of closely-related dependents will qualify a taxpayer for HOH status. Additionally, under certain circumstances, a married person with a dependent might qualify for HOH. If he or she has been living apart from his or her spouse for the last six months of the year or more.
Qualified Widow(er) QW –
If you are unmarried because your spouse died within the year, you can still file jointly or separately as a married person for that year. Whether or not you have a dependent. After the initial year of death, if you are still unmarried and have a dependent child. Then you can file under the Qualifying Widow/Widower (QW) filing status. It will allow you to continue benefiting from the same standard deduction. And the same tax rates as for married couples filing jointly. You can claim QW filing status for a total of two years.
If you are still unmarried after those two years, your filing status changes to single or head of household.
Married Filing Jointly(MFJ) –
Filing status -If you are married, you may choose to file one tax return jointly with your spouse. A joint tax return combines the incomes and deductions of each spouse. To file jointly, both you and your spouse must agree to file a joint tax return, and both must sign the return. Married Filing Jointly (MFJ) provides more tax benefits than filing separately.
Married Filing Separately (MFS) –
If you are married, you and your spouse may file separate tax returns. Married filing separately (MFS) taxpayers have the least beneficial tax treatment. But MFS status is the one way to achieve separate tax liabilities, which is a benefit not to be overlooked. Married taxpayers should carefully consider whether filing joint or separate returns will be most beneficial for their unique financial situation.