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Are You Claiming the Correct Tax Filing Status?

With tax season fast approaching this is the time that most taxpayers typically think about their filing status. A taxpayer’s status could change during the year, so it’s always a good time for a taxpayer to learn about the different filing statuses and which one they should use.

It’s important that a taxpayer uses the right filing status because it can affect the amount of tax they owe for the year. It may even determine if they must file a tax return at all. Taxpayers should keep in mind that their marital status on December 31st is their status for the whole year.

In some instances, more than one filing status may apply to taxpayers. When that happens, taxpayers should choose the one that allows them to pay the least amount of tax.

Here is a list of the five filing statuses and a description of who claims them:

  • Single: Normally this status is for taxpayers who are not married, or who are divorced or legally separated under state law.
  • Married Filing Jointly: If taxpayers are married, they can file a joint tax return. When a spouse passes away, the widowed spouse can usually file a joint return for that year.
  • Married Filing Separately: A married couple can choose to file two separate tax returns. This may benefit them if it results in less tax owed than if they file a joint tax return. Taxpayers may want to prepare their taxes both ways before they choose. They can also use this status if each wants to be responsible only for their own tax.
  • Head of Household: In most cases, this status applies to a taxpayer who is not married, but there are some special rules. For example, the taxpayer must have paid more than half the cost of keeping up a home for themselves and a qualifying person. Taxpayers should check all the rules and make sure they qualify to use this status.
  • Qualifying Widower 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.

Know your filing status. It could make a difference in the amount of tax you pay.

Written by Esther Phahla

Esther Phahla is a Certified Public Accountant and Certified Tax Coach in Temecula. She also holds a Masters of Science in Taxation. She is the Best Selling Co-Author of a Tax Planning book “Why Didn’t My CPA Tell Me That”. She can be reached at (951) 514-2652.

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