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Choosing the Appropriate Filing Status

Choosing the Appropriate Filing Status



When it comes to filing your tax return and determining if you will owe taxes when you file, choosing the most appropriate filing status is a key factor in this calculation. 


Your filing status determines:

  • How much of your income will NOT be taxed

  • Which credits and deductions you qualify for and how much


There are five filing statuses and each one relates to a different amount for the standard deduction. These five filing statuses are:

  • Married filing jointly

  • Married filing separately

  • Head of household

  • Single

  • Qualifying widow


Married Filing Jointly



You qualify for this filing status if you are considered legally married on December 31st of the tax year. Even if you got married on December 31st, you qualify for this filing status for the whole year. 


This status relates to a standard deduction of $25,900 for year 2022. This amount may change year over year.  This means that $25,900 of your gross income will not be taxed. Furthermore, if your gross income is actually $25,900 or less, none of your income is taxed. 


Credits and deductions normally double what they would be for single or married filing separately if not even higher. This is the most favorable filing status for individuals and the IRS.


Married Filing Separately 



You qualify for this filing status if you are considered legally married on December 31st of the tax year. Even if you got married on December 31st, you qualify for this filing status for the whole year. 


This status relates to a standard deduction of $12,950 for year 2022. This amount may change year over year.  This means that $12,950 of your gross income will not be taxed. Furthermore, if your gross income is actually $12,950 or less, none of your income is taxed. Also, you only have to report your income on your tax return, not your spouse. 


Several credits and deductions are excluded from this filing status, meaning you cannot claim them if using this filing status. Some of these credits include refundable credits, such as earned income tax credit and education credits. You should choose this filing status if it is the most beneficial for you over filing jointly with your spouse. 


Your are not required to be legally separated from your spouse but you may qualify for certain credits if you lived apart from your spouse during the last 6 months of the year. Your can choose to use either married filing jointly or married filing separately any year that you are married. 


Head of Household



You qualify for this filing status if you are NOT considered legally married on December 31st of the tax year AND you have at least one dependent. Even if you got divorced on December 31st, you qualify for this filing status for the whole year. 


This status relates to a standard deduction of $19,400 for year 2022. This amount may change year over year.  This means that $19,400 of your gross income will not be taxed. Furthermore, if your gross income is actually $19,400 or less, none of your income is taxed, however, you should still file a tax return since you may qualify for certain refundable credits such as the child tax credit. 


Who is considered a dependent for tax purposes?

  • Your biological child

  • Your stepchild

  • Your grandchild

  • Your adopted child

  • Your niece or nephew

  • Your sister or brother

  • Your parent or step-parent 

  • Your grandparent 

  • Your aunt or uncle

Sorry but friends of the family or your significant other's (not a spouse) children are not your dependent for tax purposes. 


These dependents must live in the house with you, make less than $4,400 the entire year (2022), and do not support themselves. 


Single



You qualify for this filing status if you are NOT considered legally married on December 31st of the tax year. Even if you got divorced on December 31st, you qualify for this filing status for the whole year. 


This status relates to a standard deduction of $12,950 for year 2022. This amount may change year over year.  This means that $12,950 of your gross income will not be taxed. Furthermore, if your gross income is actually $12,950 or less, none of your income is taxed. 


Credits and deductions are half of what they would be for married filing jointly.  You should use this filing status if you are unmarried with no dependents. 


Qualifying Widow



You qualify for this filing status if your spouse passes away in the current tax year and you have a dependent child. This status relates to a standard deduction of $25,900 for year 2022. You can claim this filing status the year your spouse passes away and two years after the year of death. In the third year after passing and ongoing, you must claim any other applicable filing status. 


This amount may change year over year.  This means that $25,900 of your gross income will not be taxed. Furthermore, if your gross income is actually $25,900 or less, none of your income is taxed. 


Credits and deductions normally double what they would be for single or married filing separately if not even higher.


Now that your have more knowledge about filing statuses, choose the correct filing status for your situation each year and ensure you are getting the best tax breaks. 


Do you still need assistance with filing your tax return?  Call or email us and we will be happy to help. 


Dukes Accounting and Tax Services

901-425-5521




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