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In the IRS system, until you file a return, you exist as an individual identifiable by a unique Social Security Number (SSN) with various wage and financial documents filed with the IRS assigned to your name and SSN. Filing a return is your opportunity to provide the IRS with info to complete your life story of the tax year in question to accurately calculate your taxable income and liability.
After entering your general demographic info on your tax return, the first section you will encounter is “Filing Status”. Your filing status is a critical factor in determining your filing requirements, standard deduction, and tax, as well as whether you are eligible to claim certain deductions and credits. There are five filing statuses:
Married Filing Jointly
Married filing Separately
Head of Household
Qualifying Widower with Dependent
In general, your filing status depends on whether you are considered unmarried or married on the last day of the year. Despite many changes in state laws, for federal tax purposes, a marriage means only a legal union between a man and a woman as husband and wife. The word “spouse” means a person of the opposite sex who is a husband or a wife. A married person can choose to file as Married Filing Jointly or Separately. While married couples have a choice, married filing separately is the most detrimental filing status and often precludes tax payers from claiming many credits and some deductions.
Head of Household is often the most misunderstood filing status. Head of YOUR household does not mean you qualify to file as Head of Household. There are two requirements that must be met in all situations when determining Head of Household status; tax payer must be unmarried and must have paid more than half the cost of maintaining a home for a qualified dependent. Note: In some cases if married couples are living apart and meet aforementioned tests, they may also be able to file Head of Household. You may be eligible to use qualifying widow(er) with dependent child as your filing status for 2 years following the year your spouse died. All others that do not qualify for another filing status and are considered unmarried should file as Single.
Determining someone‘s filing status can be complicated depending on the circumstances. The IRS has created an Interactive Filing Assistant to help tax payers to determine filing. Most self-preparation software such as Turbo Tax, provide excellent tools to assist in selecting the correct filing status.
Still unsure about your correct filing status? Let us help! If your household income was $49,000 or less in 2012, ACFB’s Atlanta Prosperity Campaign is here to help with a variety of FREE filing options ranging from self-preparation through the Turbo Tax Freedom Edition to quality tax preparation by our IRS-certified volunteers at any of our 40+ VITA tax sites. For more information on our Atlanta Prosperity Campaign Initiative and services provided, please visit: http://atlantaprosperity.org/services or call United Way’s Helpline 211 (404-614-1000).