Knowing your filing status helps you in determining your tax deductions and credits plus if you owe any taxes to the government. Using this information wisely can yield a lot of benefits for the taxpayer. There are five filing statuses to choose from; single, married filing jointly, married filing separately, head of household, and/or qualifying widow(er) with dependent child. For the purpose of our exercise, we will look at only single, head of household, and/or qualifying widow(er) with dependent child.
To qualify for the single status, you have to be unmarried or legally separated from your spouse by the last day of the tax year to be considered unmarried for the whole tax year. In the case of annulled marriages, where the court decides that no marriage ever existed, if the decision is made before the end of the year, then you have to file form 1040X to amend the taxes for the previous years when you filed as married, and file as single for the tax year in which the annulment decision was reached. If your spouse passes away during the tax year, you have to file a joint return for that year as married.
Head of the household status is reserved for individuals that have a qualifying person, living with them for more than half the year (qualifying parent doesnt have to live with them), they have paid more than half the cost of keeping up the home for that year, and are unmarried on the last day of the tax year. To be considered unmarried for the tax year, you have to file a separate return, your child or step child or foster child has to live with you for more than six months of that tax year and you have to be able claim an exemption for this child plus your spouse didnt live in your home for the last six months. Cost of keeping up the home shouldnt include the value of the services you have performed in the house or the rental value of keeping your parents with you in the house.
You qualify as a widow(er) with dependent child status if your spouse died during the year and you were qualified to file a joint return for that year. You would be able to use the same tax rates and deductions for that tax year, as you were able to before except you wont be filing a joint return. You can continue to use the status for the next two years if you stay unmarried until the last day of the second tax year. You also have to have a child, stepchild, or foster child for whom you can claim an exemption and you paid more than half the cost of keeping up the home for that year to qualify for this status.