When tax time approaches, it’s easy to feel overwhelmed by the complexity of your tax return. Those with unique financial or living situations can have complicated forms to file, which can lead to errors. But even for those whose tax returns are fairly straightforward, errors can occur.
One of the most common errors is choosing the wrong filing status. Filing incorrectly could lead to paying more in taxes than you should, and could even result in penalties.
Not sure what your tax filing status should be? We’ve got the details for you here.
Understanding the available tax filing status options
Currently, the IRS recognizes 5 filing statuses:
- Single
- Married Filing Jointly
- Married Filing Separately
- Head of Household
- Qualified Widow(er) or Dependent Child
It’s fairly easy to determine whether or not you are married. What is slightly more complicated is deciding whether you should file jointly or separately, or whether you qualify as a head of household.
Should married couples file separately or jointly?
There are a few factors to consider when deciding whether to file jointly with your spouse.
Consider how much money you make combined. For instance, if one member of the couple is the primary breadwinner, it is likely worthwhile to file jointly.
This is because joint filers are evaluated on different tax brackets, which allows their salary to be taxed at a lower rate. Additionally, you will be able to take a higher standard deduction.
In some cases, individuals are surprised to learn that they can still file taxes jointly. For instance, if you and your spouse are separated, but have not legally divorced, you can still file together. The same may be true if your spouse passed away during the tax year.
Am I a head of household?
Some filers assume that head of household refers to anyone who is the primary breadwinner for their home. In reality, this filing status is fairly specific and is only available to unmarried people who meet certain qualifications.
First, anyone who files as head of household must pay at least half of the costs towards maintaining a household. Second, they must support a qualifying person to be eligible. A qualifying person is someone who is related to you, who lives with you for at least half of the year, and for whom you provide support. The exception is the filer’s mother or father, who does not have to live with the filer who claims head of household.
The head of household filing status is most common for single parents and for unmarried people who care for their aging parents. The main benefits of this filing status include a higher standard deduction and a lower tax bracket than single filers can receive.
Need help with your taxes?
Determining your filing status is just the first step towards filing a complete and correct tax return. If you need help, or if your tax situation is complicated, contact VTax today.
Get your guaranteed maximum refund when you file your taxes with VTax. You’ll get the ultimate in quality preparation no matter how complicated, messy, or difficult your tax dilemma might seem. Request your free quote today!