Your Tax Status
How do you determine your tax status and what are the
differences between each one? Although not a tough question, it
can mean a lengthy answer, and I'm afraid in this situation,
it's going to be a lengthy response.
There are five ways in which you can classify yourself for your
tax filing status: single, married filing jointly, married
filing separately, head of household or qualifying widower with
dependent child. The remainder of this article will examine each
of these, and how you determine your correct status. Please note
here, that if more than status will apply to you, you should
choose the status that provides for the greatest tax benefit.
Let's start with the simple one: single. Determining your status
as a single filer should be a simple one, but you would be
amazed at the different situations that exist that can qualify
the taxpayer as single. For instance, if you are legally
separated at the year end, then you are considered single for
the entire year. If you have no dependents and you are
unmarried, you are considered single. There are other conditions
under which you are considered single, such as annulled
marriages. If you obtain an annulment of your marriage, then you
are considered single as though the marriage never existed, even
if you filed joint returns in earlier years. If you obtain a
divorce in one year, simply to be able to file separate returns
as single individuals, but remarry during the next year, you are
considered married, and should have filed returns as married
filing jointly or separately, not single.
If you meet all the rules of the single tax status, but you have
a dependent, or you are widowed during the year, and have
dependents, your filing status would be head of household or
widow(er) with qualifying dependent child, not single.
How do you determine your status as a married taxpayer? Well,
there are simple qualification tests that determine your legal
filing status and if you're considered as "married". If you are
legally married and living together as husband and wife, you
would of course be considered married. If you are living
together in a common law marriage that is recognized in the
state in which you reside, or the state where the common law
marriage began, then you are considered to have a filing status
of married. You are considered to be married if you are married
but living apart, however are not legally separated under a
decree of divorce or separate maintenance agreement. If you're
separated under an interlocutory (not final) decree, then you
are considered as married.
Now, there are certain extenuating circumstances that must be
considered before deciding your legal filing status. For
instance, if you were widowed during the year and do not
remarry, you may file as married with your deceased spouse for
the year in which he or she passed, and then file as a widow(er)
with qualified dependents for the next two years, provided you
do not remarry. If you remarry within the year that your spouse
was deceased, you would file as married with your current
spouse, and file your deceased spouse as married filing
separately. It's truly amazing at the unique and odd situations
that are created by we taxpayer's and even more unique in the
ways that they affect our tax situation. If you are married and
choose to file a joint return, your tax status would be married
filing jointly. All income to the household must be included on
the one return, and both spouses must sign and date prior to
submitting the return to the Internal Revenue. All exemptions,
deductions, and credits are also reported on the joint return;
in addition to sharing joint filing status, you also share joint
responsibility and liability for the information reported on the
tax return. You can however, ask for relief from joint
responsibility, in the following three ways: innocent spouse
relief, separation of liability for spouses who have not lived
together for the previous 12 months, or equitable relief which
essentially shares the liability between the filers.
There are sometimes reasons that a spouse cannot sign the tax
return, one of the more interesting situations exists when the
spouse is away in a combat zone for the military. In this type
of situation, you may sign for your spouse, and attach a
separate information statement that explains why it was
necessary for you to sign.
As you can see, choosing a tax filing status, and then
understanding your responsibilities and rights, can be a very
tedious, and frustrating experience.