When preparing your annual tax return, one of the first and most important pieces of information you’ll have to provide is your taxpayer filing status. On your state and federal tax returns, your filing status is typically defined by your marital status and whether or not you have children.
Two categories exist — married and unmarried — and there are five different types of filing statuses:
- Head of household
- Qualifying widow or widower
- Married filing jointly
- Married filing separately
Your filing status helps determine your tax bracket, deductions and other factors that affect your tax bill, including the standard deduction. Learn the difference between the different filing statuses to figure out which status, or multiple statuses, apply to you.
How to Determine Your Tax-Filing Status
It’s possible to qualify for multiple tax-filing statuses, but you should choose the one that provides the most tax advantages for you. Here’s a breakdown of the five different tax-filing statuses including advantages and applicable deductions. Use this information to determine which status best suits your financial situation so you can file your taxes accurately.
Head of Household
The head of household filing status is reserved for single individuals who maintain a household and are considered unmarried for the duration of the tax year, according to the IRS.
In order to file as head of household, you must fulfill the following qualifications:
- You must pay for more than 50 percent of your household’s expenses.
- You must be considered unmarried on the last day of the tax year.
- You must have dependent children or other dependents that rely on you, which can include biological children, siblings, parents, step-parents and in-laws.
As the head of household, a taxpayer with dependents can claim a standard deduction of $9,300 for tax year 2016. To maximize your tax deductions and credits, research other tax advantages for parents, such as the Child Tax Credit.
The single taxpayer status is reserved for individuals who were unmarried during the year and do not qualify for another taxpayer status. If you’re unmarried, legally separated from your spouse, divorced or separated by decree, you’re eligible for this status.
The standard deduction for those filing as single is $6,300, the same amount as those who are married filing separately.
Qualifying Widow or Widower
If your spouse died before Dec. 31, you can use the married filing jointly status for the year. For the next two years, you can file as a qualifying widow or widower with a dependent child.
This status allows you to use the joint tax return rate and claim the highest standard deduction available. Qualifying widows or widowers with a dependent child can take a standard deduction of $12,600, the same amount as those who are married filing jointly.
Married Filing Jointly
When married filing jointly, you are married and you and your spouse have agreed to file a tax return together. This status requires you to combine your income levels and deduct your combined expenses. You’ll also qualify for additional deductions depending on your income levels.
If you are married, your standard deduction doubles from $6,300 to $12,600. Despite that benefit, married couples face many challenges at tax time, especially when choosing the right filing status and claiming all applicable deductions.
If you are divorced by Dec. 31 of the tax year, your state and federal return will require you to file as unmarried for the entire year. You might qualify as a single taxpayer or as head of household, depending on whether you meet specific criteria.
Married Filing Separately
In order to qualify for this taxpayer status, you must be married, and you and your spouse have chosen not to file a joint tax return. This method is typically used if individuals find that they would pay less in tax when filing separately than when they file together. Couples should use a tax calculator to test both scenarios to determine the lowest tax payout.
Married individuals filing separately from their spouse can take a standard deduction of $6,300.
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What to Do If You Qualify for Multiple Tax-Filing Statuses
Americans can qualify for more than one tax-filing status on their federal and state tax returns. Individuals should explore all the tax-filing statuses they qualify for in order to choose the best filing status for them. As a rule, you should choose the filing status that allows you to save the most amount of money.
Laira Martin contributed to the reporting for this article.