Monday, June 10, 2013

Frequently Asked Questions about Tax Filing Status

As seasoned tax professionals, perhaps some of the most frequent questions we get asked are in regard to filing statuses. In fact, choosing the correct filing status is essential, as it creates the foundation for your federal income tax return—helping to determine your filing requirements, eligibility for credits and deductions and other important information. Below are some of the questions we encounter on a regular basis.

What are the possible filing statuses available?
There are five filing statuses to choose from. If you fit more than one status, it is best to choose the status that allows you to pay the least taxes. The five available statuses are:

1.       Single

2.       Married Filing Jointly

3.       Married Filing Separately

4.       Head of Household

5.       Qualifying Widow(er) with Dependent Child

I got married this past year. Should I claim Single or Married?
Your tax filing status is determined by your marital status on the last day of the year. Even if you were married on December 31st, you should claim Married status. If you were divorced during the year, you have the ability to choose to file Married Filing Jointly or Married Filing Separate. Ask your tax professional which status would allow you to pay the lowest amount in taxes.

If I’m divorced, should I claim Single status? 
Single filing status is generally only applicable to individuals who are not married, divorced or legally separated. 

My spouse died last year. What status do I use? 
In this situation, you can still file a return using the Married Filing Joint status for the year; however, you will need to select another status for the following year. Depending upon the circumstances, options would include Single or Qualifying Widow(er) with Dependent Child.

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