Filing status for income taxes

 

From here on out I'll walk through an explanation of the long form with plenty of stops along the way to describe important tax strategies that you may want to use.

The first section in the Form 1040 is the filing status section. This is an important decision because choosing the wrong filing status can cost you hundreds of dollars.

If you're married, you should decide if you should file jointly or separately. In almost all cases you're better off filing jointly because when you file separately many things like the IRA deduction and child care credit become restrictive.

But if one of you had high medical expenses, for example, you might want to file separately. The only way to know is to work through both cases. But note that if one of you itemizes deductions, the other must itemize.

If your spouse recently died, you might be able to file as a qualifying widow or widower. This status can last for up to two years following your spouse's death, and it allows you to file at the more favorable married, filing jointly rates.

If you live in a non-traditional family, you might qualify for the head of household filing status. The requirements for this are complex, and you'll have to check the IRS' instructions, but this is typically meant for single parents who have children living with them.

Those who file as a head of household enjoy standard deductions and tax rates that are between single and married taxpayers.

Finally, if you're not married and have no dependents at your home, you'll probably be filing single.

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