What To Know About Tax Filing Status Options
Choosing the correct tax filing status is one of the most important decisions when preparing your tax return. Your filing status affects multiple aspects of your tax obligation. These include deduction amounts, credit eligibility, and the amount of tax you’ll ultimately owe.
Let’s explore how filing status impacts your taxes and examine your available options. If you need help, please contact us online!
If the taxpayer is required to file a federal tax return:
Your filing status helps determine whether you’re required to file a federal tax return. Each status has different income thresholds that trigger mandatory filing.
If you should file a return to receive a refund:
Even if you’re not required to file based on income, your filing status might make you eligible for refundable credits like the Earned Income Tax Credit or Child Tax Credit. Understanding your status helps determine if filing could result in a valuable refund.
Your standard deduction amount:
Your filing status directly determines your standard deduction amount. For instance, married couples filing jointly receive a significantly higher standard deduction than single filers, potentially reducing their taxable income substantially. Read more here about standard deductions vs itemized deductions.
If you can claim certain credits:
Many tax credits have different income limits and qualification criteria based on filing status. The status you choose can affect your eligibility for credits like the Child and Dependent Care Credit or Education Credits.
The amount of tax you should pay:
Your filing status influences your tax bracket placement and, consequently, your overall tax liability. Different statuses have varying tax rate schedules, which can result in different tax obligations even with the same income level.
Ready to get started with tax filing? Contact the tax pros today!
Related: How to Fill Out a W-4?
The 5 Tax Filing Statuses
Now let’s talk about the five filing statuses.
1. Single
Normally, filing a status for “Single” is for taxpayers who are unmarried, divorced, or legally separated under a divorce or separate maintenance decree governed by state law.
2. Married filing jointly
If a taxpayer is married, they can file a joint tax return with their spouse. When a spouse passes away, the widowed spouse can usually file a joint return for that year.
3. Married filing separately
Married couples can choose to file separate tax returns. When doing so, it may result in less tax owed than filing a joint tax return.
4. Head of household
Unmarried taxpayers may be able to file using this status, but special rules apply. For example, the taxpayer must have paid more than half the cost of keeping up a home for themselves and a qualifying person living in the home for half the year.
5. Qualifying widow or 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.
Related: When are Taxes Due? Tax Deadlines You Need to Know
Contact Tax Pros Online to Help with Tax Filing Services!
We get it – determining the right filing status for your situation can be complex. That’s why you should rely on the experts at Tax Pros Online to help! Tax Pros Online’s experienced tax professionals can help you navigate these choices and ensure you select the most advantageous filing status for your circumstances. For assistance on how to prepare for tax season, please read our step-by-step guide here.
Our experts stay current with tax law changes and can provide personalized guidance to maximize your tax benefits while maintaining full compliance with IRS regulations. To see a complete list of all our tax services, please refer to our tax information page here.
Ready to get started? Contact us today!