Taxsmith – What is the Best Filing Status?

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February 17, 2013
Taxsmith – Taxable and Nontaxable Income
February 17, 2013

Taxsmith – What is the Best Filing Status?

Taxsmith urges that it is always important to use the correct filing status when filing your tax return. It can impact the tax benefits you receive, the amount of your standard deduction and the amount of taxes you pay. It may even impact whether you must file a federal income tax return.

The first question you should ask yourself is are you single, married or the head of your household? There are five filing statuses on a federal tax return. The most common are “Single,” “Married Filing Jointly” and “Head of Household.” The Head of Household status is probably the one most often claimed in error.

Taxsmith has tips to help you choose the best filing status…

  • What was your marital status on the last day of the year (December 31st). This is normally your martial status for the entire year.
  • This may be obvious, but if you have more than one choice for filing status always choose the one that gives you the largest refund or lowest balance due.
  • Married individuals can either file Married Filing Joint or Married Filing Separate (with a few exceptions). If one spouse files separate the other spouse has to file the same. If your spouse died that year, then you can still file a joint return for that year. Taxsmith advises taxpayers that filing jointly gives a larger credit and is more advantageous to taxpayers than filing separately.
  • Head of Household is normally only claimed if you are single, pay at least half of the cost of maintaining a home for yourself and your qualifying dependent(s).
  • If you are a Qualifying Widow(er) with a Dependent Child this status may apply if your spouse died in the prior 2 years and you have a dependent child and meet certain other qualifications.

If you ever have any trouble deciding what is the best filing status to select please contact Taxsmith at 888.741.0272 or email us at info@taxsmith.com.