Throughout the year life happens and things go unchecked all the time. Especially when it comes to updating your employer about your filing status for taxes when a life event happens. However, understanding what filing status you should be claiming is where you should first start.

 

There are hundreds of questions when it comes to personal taxes, but the most basic ones you will answer for yourself when you understand your filing status are:

• Is the taxpayer required to file a federal tax return or should they file to receive a refund?
• What is their standard deduction amount?
• Is the taxpayer eligibility for certain credits?
• How much tax they should pay?

The taxpayer’s filing status generally depends on whether they are single or married on Dec. 31 and that is their status for the whole year.

Below is a list of filing statuses and their descriptions.

• Single. Normally this status is for taxpayers who are unmarried, divorced or legally separated under a divorce or separate maintenance decree governed by state law.
• Married filing jointly. If a taxpayer is married, they can file a joint tax return with their spouse. When a spouse passes away, the widowed spouse can usually file a joint return for that year.
• Married filing separately. Alternatively, married couples can choose to file separate tax returns. It may result in less tax owed than filing a joint tax return.
• Head of household. Unmarried taxpayers may be able file using this status, but special rules apply. For example, the taxpayer must have paid more than half the cost of keeping up a home for themselves and a qualifying person living in the home for half the year. Taxpayers should check the rules to make sure they qualify.
• Qualifying widow(er) with dependent child. This status may apply to a taxpayer if their spouse died during one of the previous two years and they have a dependent child. Other conditions also apply.

More than one filing status may apply to an individual. Speaking with a tax professional can help you get the answers on which filing status will help you keep the most tax money in your pocket. Tax season is here before you know it and BASC Expertise will be here to help you during this time!

 

Any questions you need answered right away? Give our office a call at 480-355-1398