When you filed your 1040 there are 5 different filing statuses that the IRS will accept. What filing status you choose on your tax return will make a difference for your tax rate and deductions/credits. Below, we review the basics of what each type of filing status is and what it means to you. As always these are general descriptions. Please contact us to make sure you are filing correctly.
Lets Talk Filing Status!
Single
Many people assume that you are single if you are divorced, have never been married or have your spouse pass away. They would be correct. However, there can be exceptions.
You should choose this filing status if:
- You have never been married.
- You were legally separated under a decree of divorce. (But if your divorce wasn’t final in 2017 you can’t file as single.)
- You were widowed before Jan 1, 2017 and don’t have dependent children.
Married Filing Jointly
Ah, the joys of matrimony. Most married couples assume this is the only way to file. That isn’t true. But, this might be your best option to reduce taxes. Things you should know about claiming this filing status. All income and deductions will be reported on one tax return. And, if you file jointly whatever taxes are calculated as owed will be the responsibility of both parties who are listed and sign the tax return.
You should choose this filing status if:
- You were married at the end of 2017, even if you weren’t living together.
- Your spouse passed away in 2017 and you didn’t remarry by Dec 31, 2017.
- Your spouse passed away in 2018 but before you filed your 2017 tax return.
- If you are married to a nonresident alien generally you cannot file married filing jointly.
- If you are married to a resident alien you may be able to filed a joint return.
Married Filing Separately
Okay, this is where it can get tricky. Just because you are married in a year does not mean that you have to file a joint return with your spouse. Some individuals may choose to file separately for a variety of reasons. Choosing this type of filing status does however come with it’s drawbacks. You cannot claim as many deductions and you may be taxed at a higher rate. It is also important to note that in community property states you may not be able to choose this filing status.
You should choose this filing status if:
- You and your spouse have discussed the tax implications and have decided it is what you want to do.
- If it has tax benefits for you.
Head of Household
When an individual files as Head of Household the IRS considers them to be unmarried and providing a home for certain other persons. This can be confusing because even some who were legally married in 2017 may qualify for this filing status. If you think you should choose this filing status you will need professional CPA input.
You should choose this filing status if:
- Your divorce wasn’t final in 2017.
- You lived apart from your spouse for the last 6 months of 2017 and you meet other specific criteria.
- 3. You are married to a nonresident alien and you do not choose to treat him/her as a resident alien.
Qualifying Widow(er) with Dependent Child
This filing status is used by individuals who have had a spouse pass away and have dependent children. There are criteria to determine if you are able to choose this filing status. It is important to note that to choose this filing status you must meet ALL of the criteria listed below.
You should choose this filing status if:
- Your spouse died in 2016 or 2017 and you didn’t remarry before the end of 2017.
- You have a child or a stepchild that you claim as a dependent. *Cannot be a foster child.
- This claimed child lived in your home for all of 2017.
- You paid over half the cost of keeping up your home.
You could have filed a joint return with your spouse the year he/she passed away, even if you didn’t actually do so.