Filing Status 101
It seems that here lately we've been getting asked how people need to file...a LOT! Some of the questions arise out of divorce, but others are simply due to misinformation out there. Hopefully this brief explanation will provide some help, but if not we're here to answer any questions.
The bulk of people fall into one of these four categories, the 5th being Qualified Widow(er)- this can only be claimed for the two years following the death of a spouse, and there has to be a dependent involved.
Basically if you are married on the last day of the year you file either Married Joint or Married Separately, will get into the exceptions later.
Married Joint is absolutely the BEST way to file with the lowest tax brackets and most deductions. The only downfall to this is that spouses share the debt, that whole "what's mine is yours thing" definitely comes into play here! There is such a thing as an Injured Spouse form, for those who owe previous tax debt, child support, etc...The injured spouse on a jointly filed tax return files Form 8379 to get back their share of the joint refund when the joint overpayment is applied to a past-due obligation of the other spouse. **This only gets the injured spouse their share of the refund, so if wifey doesn't work & all the refund is going to hubby's child support debt, this is a waste of time**
Married Separately is absolutely the WORST way to file with the highest tax brackets and the loss of most deductions. The only upside is that each spouse is responsible for their own side of it, and if you've got a non-compliant, soon-to-be ex, you can each take care of your own business before you're single.
If you are single on the last day of the year you either file Single or Head of Household.
Single is normally a status for taxpayers who aren’t married, or who are divorced or legally separated under state law.
Head of Household- In most cases, this status applies to a taxpayer who is not married, but there are some special rules. For example, the taxpayer must have paid more than half the cost of keeping up a home for themselves and a qualifying person. Don’t choose this status by mistake. Be sure to check all the rules. **Head of household must have a qualified dependent, otherwise you're single**
This is a basic rundown of the options... as with anything related to the IRS, there are options not listed here due to their specificness. If you have a sticky situation, or need help deciding which filing status is best for your and your family, please give us a call at 325-949-1040 and we'll be happy to help!