Know Your Status

One of the first steps to complete in relation to filing your income tax is to figure out which filing status to use. This is very important as it can significantly affect the amount of your tax refund.

It is important to note that what is of importance is your status as of December 31, 2017 and not at any other time during the year. If you have been married for the year and unfortunately got divorced on December 31, 2017, you are considered for tax purposes single for the entire year.

There are five filing statuses on can use when filing their income taxes. These include: single, married filing jointly, married filing separately, head of household and qualifying widow or widower with a dependent child.

For income tax purposes if you’re single, divorced or legally separated as of December 31, 2017, the status that you will most probably fall in is that of being a single person.

Married filing jointly as its name suggest, is where a married couple files their returns together as one return. Most couples tend to file a joint income tax return as it’s usually easier but couples do have a choice when it comes to filing their tax returns.

Couples can also file their income tax returns separately if they so desire, in this case their filing status would be married filing separately. This entails a little extra effort on the couple’s part but you might want to figure your taxes both ways and see which way results in the least amount of tax liability.

Next up is the head of household filing status that is available when filing your tax return.

Lots of single parents qualify as head of household filing status. If you’re not married but you pay more that half the cost of keeping up with a home for a qualifying person, then this status might be the best filing status for you.  There are lots of special rules one has to meet to be able to qualify for this filing status but it is worth the extra work as the financial implication on your tax return can be great.

The final filing status for income tax purposes is that of a qualifying widow or widower with a dependent child. If your spouse died within the last two tax year and you have a dependent child, you might be able to use this filing status.

This income tax filing status has special rules that apply but the financial implication on your tax refund is worth the extra work. The best way to determine your filing status is to call our offices, Metro Accounting And Tax Services, CPA at 404-990-3365 and one of our accountants will be happy to guide you through the process.

User | 11/01/2018