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The first step to filing your Federal income-tax return is to determine which filing status to use. In other words, two people making exactly the same amount of income could have different income-tax calculations due solely to a difference in their filing status. Your filing status is used to determine your filing requirements, standard deduction, and eligibility for certain credits and deductions, and your correct tax. There are five filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household and Qualifying Surviving Spouse.
Here are some facts about the five filing-status options the IRS wants you to know so that you can choose the best option for your situation:
1) Your marital status on the last day of the tax year (Dec. 31) determines your marital status for the entire year.
2) If more than one filing status applies to you, choose the one that gives you the lowest tax obligation.
3) Single filing status generally applies to anyone unmarried, divorced or legally separated according to state law, and you do not qualify for another filing status.
4) In order to file as Married Filing Jointly, you must be married as of the end of the year and both you and your spouse must agree to file a joint return. On a joint return, you report your combined income and deductions. You can even file a joint return if one spouse had little or no income. If you and your spouse choose to file a joint return and there are Federal or state taxes due, you will both be responsible for the debt. Also, a joint return requires both signatures.
A recent IRS ruling advises that married same-sex couples may use this filing status whether or not their state of residence recognizes their union.
5) If your spouse died during the year and you did not remarry during 2022, you may still file a joint return with that spouse for the year of death.
6) If you are married, you may prefer to file Married Filing Separately (MFS) if you want to be responsible for your own tax, or if filing separately results in a lower overall tax. If you use this status and either you or your spouse decides to itemize your individual deductions, both of you must itemize your individual deductions. Be cautious when filing married filing separately, as many income-tax benefits are lost. Certain credits, such as the Earned Income Tax Credit and the Child and Dependent Care Credit, are usually not allowed when you file MFS. Additionally, a couple cannot change the filing status from married filing jointly to married filing separately after the due date of the return. It is highly recommended that spouses complete their tax liability under both the “joint” and “separate” statuses to see which will work best for them. Taxpayers may want to discuss this tax-filing option with a tax advisor.
7) Head of Household generally applies to taxpayers who are unmarried or considered unmarried on the last day of the year. Certain married people who lived apart from their spouse for the last six months of the year may be considered unmarried for the head-of-household purposes, even if you are not divorced or legally separated. You must also have paid more than half the cost of maintaining a home for you and a qualifying person to qualify for this filing status.
8) You may be eligible to use Qualifying Surviving Spouse (QSS) as your filing status for two years following the year of death of your spouse. For example, if your spouse died in 2022 and you have a dependent child, you may use this filing status for both 2023 and 2024 tax years. The advantage of this filing status is that you can use the married filing jointly tax rates and the higher standard deduction.
Most people don’t devote any thought to their filing status, and that can be a mistake. Make sure you know what each tax-filing status entails, and choose the one that best fits your personal and tax situation.
Barry Lisak is an IRS enrolled agent specializing in personal and small business taxes for 30 years. Any questions can be directed to him at 516-829-7283, or email@example.com.
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