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Filing Status
Your filing status for the entire year is determined by your status as of December 31. If you were married on December 31, your status for the year is married. If you received your divorce on December 31, you cannot file as married for the year. Your filing status can vary from year to year, depending on your circumstances. There are four different filing statuses:
Single - Your filing status is single if, on the last day of the year, you are unmarried or legally separated and not eligible for another filing status.
Head of Household - Head of household gives you a higher standard deduction than single and may result in a lower tax liability for you. In order to file as head of household you must meet three requirements.
1. You are unmarried or Considered Unmarried on the last day of the year.
2. You paid more than half the cost of keeping up your home for the year.
3. A Qualifying Person lived with you in the home for more than half the year.
Married filing jointly - Married filing jointly gives you a higher standard deduction and may result in a lower tax liability. You must be married as of December 31, and agree with your spouse to file a joint return. If your spouse died during the year, you may file jointly if you otherwise qualify. On the return, you will combine all your income and allowable deductions. Normally, this status will result in a lower tax liability for the couple. You may be held liable for the tax due on the joint return. There are cases where you may receive relief from this liability. See innocent spouse relief. Once you file a joint return, you cannot amend that return to choose married filing separate.
Married filing separately - If you are married, you may choose this status. This status makes you responsible only for the tax on your income and deductions. If you choose this status, you and your spouse must both itemize or both take the standard deduction. Your standard deduction is one-half the deduction allowed for married filing joint. You may change your filing status to married filing joint by filing an amended return.
Generally, married filing separately will result in a higher tax liability than filing a joint return. The only way to know for sure what difference it makes is to calculate your taxes both ways. When you file a separate return you:
1. Cannot take the credit for child and dependent care expenses, the earned income credit, the education credits.
2. Cannot exclude any interest income from qualified U. S. savings bonds that you used to pay higher education expenses.
3. Must include up to 85% of your social security income if your spouse lived with you at any time during the year.
4. Cannot roll over amounts from a traditional IRA to a Roth IRA if your spouse lived with you at any time during the year.
5. Will be subject to reduced deductions and credits for capital losses, the child tax credit, retirement savings contribution credit.
Considered Unmarried
You are considered unmarried if you meet five tests:
1. You do not file a joint return
2. You paid more than half the cost of keeping up a home
3. Your spouse did not live in your home at any time during the last six months of the year.
4. Your home was the main home for your child, stepchild, or eligible foster child for more than half the year.
5. You can claim an exemption for the child.
Qualifying Person
A qualifying person is your child or parent. A child qualifies if they are single. A married child or a parent qualifies if you can claim an exemption for them.
