Your status in life may leave you with different choices regarding your tax filing status. If you are married, you may either file as married filing jointly or as married filing separately. The filing status you choose depends on the advantages each filing status provides you. You should choose the filing status that gives you the maximum advantage. You may change your filing status each year, if appropriate.
Choosing the correct filing status may reduce your tax bill. For example, filing as married filing jointly usually provides more tax benefits to most married spouses than filing separately. According to the IRS: “If you and your spouse decide to file a joint return, your tax may be lower than your combined tax for the other filing statuses. Also, your standard deduction (if you do not itemize deductions) may be higher, and you may qualify for tax benefits that do not apply to other filing statuses.”
The five filing statuses you can choose from are:
- Single: If you are unmarried, divorced or legally separated under state law, you can choose this filing status.
- Married Filing Jointly: If you are legally married, you can file as married filing jointly.
- Married Filing Separately: If you are legally married, you can choose to file two separate individual tax returns. This status may provide more tax benefits in some cases.
- Head of Household: Usually, you may use this filing status if you are unmarried. To use this filing status, you must have paid more than half the cost of keeping up a home for yourself and a qualifying person.
- Qualifying Widow(er) with Dependent Child: If your spouse died, and you have a dependent child, you may use this filing status.
Before choosing a filing status, ensure that you meet all the eligibility criteria. If you are eligible for more than one filing status, consider the status that reduces your tax bill the most. For this, you will need to research which tax credits and deductions are available under a filing status.