Confused About Tax Filing Status? What You Need to Know
Make Sense of Tax Filing Status: An Introduction
Why does filing status matter so much anyway?
Disclaimer: I am not a CPA and this is not professional advice. Please refer to this only for educational or entertainment purposes. (But seriously, who finds tax entertaining?)
Your filing status changes after a major life event such as marriage, and it might be worth listening to an accountant. If this idea doesn’t sound so important, then feel free to skip my yapping. But if you’ve read even this far, then go on right ahead and you might learn something new.
Single Filing Status
What does single filing status mean? If you’ve filed taxes at any point in your life, chances are you may have filed as “Single” in the checkbox. This applies to all individuals not married, been divorced, or legally separated. You must meet one of these requirements by the 31st of December.
Features:
- Standard Deduction: $14,600 (2024)
- Generally higher tax rates that Married Filed Jointly
- Full Roth IRA contribution limits if within the threshold
- Education related tax benefits
Married Filing Jointly
Married filing jointly is only for those who are, you guess it, legally married. For those families where this is relevant, there are specific incentives, or credits, that are available in greater amounts here. These credits are designed to help taxpayers and spouses who support dependents.
Features:
- Standard deduction: $29,200 (2024)
- Higher income thresholds
- Greater eligibility for Child Tax Credit and Earned Income Credit
Married Filing Separately
Some folks may opt for “Married Filing Separately” in their taxes, but unless you have a special circumstance, you may be disallowed from accessing credits or incentives meant for people in different tax brackets.
One of those special circumstances may involve a spouse paying off student loan debt. Where repayment plans may involve income-based repayment plans, the choice to file separately can help reduce the monthly payments. The bank may expect a specific figure from you, but this is only based on individual income (from your tax return.) Choosing to exclude the income from your spouse on your tax return could help you in situations where cash flow is tight.
Features:
- Standard Deduction: $14,600 (2024)
- Student loan payments
- Improving Cash Flow
Head of Household
Filing as Head of Household offers greater tax benefits than filing as single, and single parents with children living at home may qualify. The requirements for this filing status are: maintaining single status, paying more than 50% of household expenses, and having a qualifying dependent who lives with you for more than half the year.
Features:
- Standard Deduction: $14,600 (2024)
- Higher standard deduction than Standard Filing
- Tax Brackets with higher thresholds
Qualifying Widow(er)
Filing as a Qualifying Widow(er) offers similar tax benefits to filing as Married Filing Jointly for a limited time after the death of a spouse, helping ease the financial transition for surviving spouses with dependent children. To qualify, several requirements must be met: your spouse must have died in the previous two years; you must have a dependent child (son, stepson, daughter, stepdaughter, or adopted child) living with you for the entire year; you must have been eligible to file jointly with your spouse in the year they died; you must not have remarried; and you must pay more than half the cost of keeping up your home.
Key Benefits:
- Uses the Married Filing Jointly standard deduction: $29,200 (2024).
- Uses the Married Filing Jointly tax brackets.
- Allows you to maintain a lower tax liability during the two-year period.
Available Deductions & Credits
The Standard Deduction by Status (2024):
- Single: $14,600
- Married Filing Jointly: $29,200
- Married Filing Separately: $14,600
- Head of Household: $21,900
- Qualifying Widow(er): $29,200
Here’s a clear example to show how it works:
Let’s say you make $60,000 per year. I’ll show you how your taxes would be different based on your filing status:
Single:
- Standard deduction: $13,850
- Taxable income: $46,150
- Tax bill (roughly): $5,793
Married Filing Jointly (combined income $60,000):
- Standard deduction: $27,700
- Taxable income: $32,300
- Tax bill (roughly): $3,476
- That’s about $2,317 less than filing single!
Special Considerations
Changes in Marital Status Your marital status on December 31st determines your filing status for the entire tax year, with a few key points:
- If you get married on December 31st, you’re considered married for the whole tax year. You can file jointly even if you were single for the first 364 days.
- If you get divorced on December 31st, you’re considered single for the whole tax year. You can’t file jointly with your ex-spouse even if you were married most of the year.
Death of Spouse If your spouse passes away during the tax year, there are several important considerations:
- For the Year of Death:
- You can still file jointly for the year your spouse died
- You’ll file as “Married Filing Jointly” and sign the return for your deceased spouse
- Write “Filing as surviving spouse” in the signature area where your deceased spouse would sign
- For the Following Years:
- You might qualify for Qualifying Widow(er) status if:
- You have a dependent child or stepchild
- You paid more than half the cost of maintaining your home
- You haven’t remarried
- This status lets you use joint return tax rates for two years after your spouse’s death
- After these two years (or if you don’t qualify), you’ll typically file as Single or Head of Household
Common Mistakes to Avoid
People often pick “Head of Household” when they don’t qualify. Just because you’re single with kids doesn’t automatically mean you can use this status. You need to pay more than half the costs of keeping up your home AND have a qualifying dependent living with you for more than half the year.
For example: If your child lives with their other parent most of the year, you probably can’t claim Head of Household – even if you pay child support.
Qualification Requirements People Miss
For Married Filing Jointly:
Both spouses must agree to file together
You need valid Social Security numbers for both people
You can’t be married filing jointly if you’re getting divorced and lived apart for the last 6 months of the year
Joint Liability (When You File Together)
This is super important but people often don’t understand it. When you file jointly with your spouse:
You’re BOTH responsible for the entire tax bill
If your spouse makes a mistake or lies on the return, you could be held responsible too
You might have to pay their tax debt even if you later get divorced
Example: If your spouse had a side job and didn’t report $10,000 in income, the IRS can come after either of you for the taxes owed – even years later!
Comparison of Filing Statuses
Let’s review with Single. This one’s pretty basic – it’s for people who aren’t married. Maybe you live alone, or with roommates, but you’re not legally married on December 31st of the tax year. A lot of college students and young workers use this status.
Married Filing Jointly is when you and your spouse team up on your taxes. It’s usually the best deal because you get bigger tax breaks and lower tax rates. Plus, it’s easier since you only have to file one tax return instead of two. You share everything – your income, your deductions, all of it.
Married Filing Separately is like the opposite – you’re married but each person does their own tax return. Sometimes people pick this if one spouse has a lot of medical bills or if they don’t trust each other with money stuff. But you usually end up paying more taxes this way.
Head of Household is for single people who take care of others. Like if you’re not married but you pay more than half the costs of keeping up a home for yourself and a qualifying person (like your kid or dependent parent). You get better tax rates than regular single status.
Qualifying Widow(er) is for people whose spouse died recently and they have a dependent child. It lets you keep the good tax rates from Married Filing Jointly for two years after your spouse dies, which helps during a tough time.
Sources
- IRS.gov
- Nerdwallet.com
- Picture Credit: Thilo Lehnert
