You must determine your filing status before you can determine whether you must file a tax return, your standard deduction, and your correct tax. You also use your filing status to determine whether you are eligible to claim certain deductions and tax credits. Never assume your filing status is the same as last year as this could cause you problems either now or in the future.Your filing status may change from year to year.
There are five filing statuses on a federal tax return. Each status is taxed at different rates and has differing tax rules that apply to it. If more than one filing status applies to you, choose the one that allows you to pay the lowest taxes.
- Married Filing Jointly
- Married Filing Separately
- Head of Household
- Qualifying Widow(er)
Marital status (married or unmarried) is determined on the last day of the tax year (December 31). The marital status of a person who died during the year, as well as that of the surviving spouse, is determined as of the date of death.
A taxpayer’s filing status is single if, on the last day of the year, he or she is unmarried or legally separated from his or her spouse under a divorce or separate maintenance decree, and does not qualify for another filing status.
Married Filing Jointly
A taxpayer can choose married filing jointly as his or her filing status if the taxpayer is married and both spouses agree to file a joint return. On a joint return, married taxpayers report all of their combined income and deductions. Taxpayers can file a joint return even if one of the spouses had no income or deductions.
Married Filing Separately
A taxpayer can choose married filing separately as his or her filing status if the taxpayer is married. If a taxpayer and his or her spouse do not agree to file a joint return, the taxpayer must use the married filing separately status unless the taxpayer is considered unmarried under the head of household rules.
Head of Household
A taxpayer can file as head of household if he or she meets all of the following requirements:
- The taxpayer is unmarried or “considered unmarried” on the last day of the year.
- The taxpayer paid more than half the cost of keeping up a home for the year.
- The taxpayer maintains a household for either of the following:
- A qualifying child who is a dependent of the taxpayer for more than six months.
- His mother or father for the entire year who the taxpayer may claim as a dependent on his return.
A taxpayer may file as qualifying widow(er) if he or she meets both of the following requirements:
- The taxpayer’s spouse died in either of the two tax years immediately preceding the current tax year.
- The taxpayer paid over half the cost of maintaining his or her household which is the home of his or her dependent son, stepson, daughter, or stepdaughter for the entire year.
In the actual year the spouse died, the taxpayer must have been eligible to file married filing jointly in order to use the qualifying widow(er) status for the next two years afterward. For the next two years, the taxpayer may file as qualifying widow(er) if he or she has a dependent son, stepson, daughter, or stepdaughter. If the taxpayer remarries during any of these years, the taxpayer cannot file as qualifying widow(er).
The standard deduction is a dollar amount that reduces the amount of income on which you are taxed. The standard deduction was placed in the tax law to provide relief for taxpayers with few itemized deductions. An individual taxpayer may claim a standard deduction or elect to itemize deductions in calculating taxable income. The amount of the standard deduction is adjusted for inflation and varies based on filing status. If a taxpayer’s gross income is less than the standard deduction amount, the taxpayer has no taxable income.
2016 and 2017 Standard Deduction for Most People
- For single — $6,300 ($6,350 in 2017)
- For head of household — $9,300 ($9,350 in 2017)
- For married filing jointly — $12,600 ($12,700 in 2017)
- For married filing separately — $6,300 ($6,350 in 2017)
Standard deduction for dependents: The standard deduction for an individual who can be claimed as a dependent on another person’s tax return is generally limited to the greater of:
- The individual’s earned income for the year plus $350 (but not more than the regular standard deduction amount, generally $6,300). If the individual is 65 or older or blind, the standard deduction may be higher.
To figure the dependent’s standard deduction use Worksheet 1 Standard Deduction Worksheet for Dependents.
Taxpayers who benefit from itemizing
Taxpayers who have deductions in excess of the amount of allowable standard deduction for the year will benefit by itemizing deductions. For example, taxpayers with large uninsured medical and dental expenses, who paid interest or taxes on their home, significant amounts of unreimbursed employee business expenses, large uninsured casualty or theft losses, or large charitable contributions should itemize.
- Taxpayers who itemize must file form 1040 and complete Schedule A, Itemize Deductions.
- Gifts are never tax deductible, unless they are made to a 501(c)(3) charity or similar organization. You can check here to search the IRS’s database for 501(c)(3) organizations.
Note: You should first figure your itemized deductions and compare that amount to your standard deduction to make sure you are using the method that gives you the greater benefit.
Electing to itemize for state tax or other purposes: Even if your itemized deductions are less than your standard deduction, you can elect to itemize deductions on your federal return rather than take the standard deduction. You may want to do this if, for example, the tax benefit of itemizing your deductions on your state tax return is greater than the tax benefit you lose on your federal return by not taking standard deduction. To make this election, you must check the box on line 30 of Schedule A.
Additional Amount for Old Age and Blindness
There is an additional standard deduction amount for taxpayers who are age 65 or older, or who are totally or partly blind.
Not totally blind. If the taxpayer is partly blind, the taxpayer must get a certified statement from an eye physician or registered optometrist that states either;
- The taxpayer cannot see better than 20/200 in the better eye with glasses or contact lenses, or
- The taxpayer’s field of vision is 20 degrees or less.
If the taxpayer’s eye condition will never improve beyond these limits, the examining eye physician must include this fact in the certification. If the taxpayer’s vision can be corrected beyond these limits only by contact lenses that can be worn only briefly because of pain, infection, or ulcers, the higher standard deduction for blindness is allowable as long as the taxpayer otherwise qualifies.
Individuals Not Eligible for the Standard Deduction
The following taxpayers are not eligible to take the standard deduction, but must itemize instead.
- A married taxpayer filing a separate return, and the taxpayer’s spouse itemizes deductions
- A taxpayer filing a tax return for a short tax year because of a change in annual accounting period
- A taxpayer who is a nonresident or dual-status alien during any part of the year. You are considered a dual-status alien if you were both a nonresident and resident alien during the year.
Nonresident Spouse Treated as a Resident
An alien is any individual who is not a U.S. citizen or U.S. national. A nonresident alien is an alien who has not passed the green card test or the substantial presence test.
If you are a U.S. citizen or U.S. resident alien married to a nonresident alien you are considered Married Filing Separately unless you qualify for a different filing status. You can choose to treat your nonresident spouse as a U.S. resident for U.S. federal income tax purposes. This allows you and your spouse to file a joint return, but also subjects your nonresident alien spouse’s worldwide income to U.S. income tax. If you choose to file as residents, you must file a joint return for the year you make the choice. However, you can file joint or separate returns in later years.
To make the election to file jointly, you must attach a statement signed by both of you to the joint return for the first tax year to which the election applies. Generally, this will require obtaining an Individual taxpayer identification number (ITIN) for the nonresident spouse because the nonresident spouse generally will not qualify for a Social Security Number.
- Marriage Annulled. If a taxpayer obtains a court decree of annulment, which holds that no valid marriage ever existed, he or she is unmarried even if he or she filed joint returns for earlier years. The taxpayer must file form 1040X, Amended U.S. Individual Income Tax Return, claiming single or head of household status for each tax year affected by the annulment that is not closed by the statute of limitations for filing a tax return. The statute of limitations generally does not expire until three years after the original return was filed.
- Divorced and Remarried Same Person. If taxpayers obtain a divorce in one year for the sole purpose of filing tax returns as unmarried individuals, and at the time of divorce they intended to and did remarry each other in the next year, they must file as married individuals in the year they were divorced.
- Spouse died. If a taxpayer’s spouse died during they year, and the surviving spouse does not remarry, they are considered married for the whole year for filing status purposes.
- Married but Living Apart. In general, married persons who do not live together are considered married for tax purposes. However, if a taxpayer lives apart from his or her spouse and meets certain conditions, he or she may be “considered unmarried” for filing status purposes.
- Joint and Several Liability. Each spouse may be held responsible, jointly and individually, for all the tax and for any interest or penalties due on their joint return, even if all the income was earned by only one spouse. In addition, a taxpayer may be held responsible even if the taxpayer’s divorce decree states that the taxpayer’s former spouse is responsible for any amounts due on joint returns previously filed before their divorce.
- Injured Spouse. When a joint return is filed and only one spouse owes legally enforceable past-due debt(s) such as Federal tax, State income tax, State unemployment compensation, Child support, Spousal support, or a Federal nontax debt (such as a student loan), the other spouse can be considered an injured spouse. By filing Form 8379 (PDF), Injured Spouse Allocation, an injured spouse can get a refund for his or her share of the overpayment that would otherwise be used to pay this past obligation.
- Choosing married filing separately as your filing status may affect the taxability of Social Security benefits (up to 85% of any social security retirement benefits you received will be taxable if you lived with your spouse at any time during the tax year). It may also affect your eligibility to claim certain deductions and credits. Married couples who file separately usually pay more tax than those who file jointly. If separate returns are filed, both taxpayers must compute their tax in the same manner. If one spouse itemizes deductions, the other spouse will have a standard deduction of zero and will have to itemize deductions.
- You can change your filing status from a separate return to a joint return by filing an amended return using form 1040X, Amended U.S. individual income tax return.
- Once you file a joint return, you cannot choose to file separate returns for that year after the due date of the return.
- Exception: A personal representative may revoke an election to file a joint return previously made by the surviving spouse alone. This is done by the filing a separate return for the decedent within one year from the due date of the return of the surviving spouse (including any extension). Refer to Publication 559, Survivors, Executors, and Administrators.
- If a taxpayer qualifies to file as head of household, the tax rate is usually lower than the rates for single or married filling separately. The taxpayer also receives a higher standard deduction than if filing as single or married filing separately.
- Considered Unmarried. A taxpayer is considered unmarried on the last day of the tax year if he or she meets all of the following tests:
- The taxpayer files a separate return.
- The taxpayer paid more than half the cost of keeping up the home for the tax year
- The taxpayer’s spouse did not live in the taxpayer’s home during the last six months of the tax year. A spouse is considered to live in the taxpayer’s home even if he or she is temporarily absent due to special circumstances.
- The taxpayer’s home was the main home of the taxpayer’s child , stepchild, or eligible foster child for more than half the year. The taxpayer and the qualifying person are considered to live together even if one or both are temporarily absent due to special circumstances, such as illness, education, business, vacation, or military service. It must be reasonable to assume that the absent person will return to the home after the temporary absence. The taxpayer must continue to keep up the home during the absence.
- Cost of Maintaining a Household. In order to file as head of household, a taxpayer must have paid more than half the cost of maintaining a household for the year. The costs included when making this determination are:
- Mortgage interest (do not include principal)
- Real estate taxes
- Insurance on the home
- Food eaten in the home
- The taxpayer must be able to claim a dependency exemption for the child. However, a taxpayer can still meet this test if he or she cannot claim the dependency exemption only because the noncustodial parent is allowed to claim the child. The child may be treated as the qualifying child or qualifying relative of the noncustodial parent if both of the following conditions are met:
- The custodial parent signs a form 8332 (PDF), Release/ Revocation of Release of Claim to Exemption for Child by Custodial Parent, or a substantially similar statement and,
- The noncustodial parent attaches the form 8332 or the statement to his or her return.
- Non-Relative Dependent. A dependent who meets the relationship test because he or she lives in the same household with the taxpayer for the entire year cannot qualify the taxpayer for head of household status. The dependent must be related to the taxpayer by meeting any of the other relationships.
- Death or Birth. A taxpayer may be eligible to file as head of household if the individual who qualifies the taxpayer for this filing status is born or dies during the year. The taxpayer must have provided more than half of the cost of keeping up a home that was the individual’s main home for more than half the year or, if less, the period during which the individual lived.
For more information about filing requirements visit, http://www.irs.gov