One aspect of taxes that often causes confusion is filing status. What is it, and why does it matter? Understanding your filing status can have a significant impact on your tax liability, so it’s essential to know the basics. Keep reading to learn more!
What is a Filing Status?
Your filing status is a category that defines your tax-filing group. It determines your tax rate, standard deduction, and eligibility for certain credits and deductions.
There are five filing statuses. Each status has its unique requirements and tax implications:
- Married Filing Jointly
- Married Filing Separately
- Head of Household
- Qualifying Widow(er) with Dependent Child
Single Filing Status
This is your status if you’re unmarried or legally separated from your spouse on the last day of the year and don’t qualify for other filing status.
Married Filing Jointly & Separately
If you’re married, you can choose to file jointly or separately. Filing jointly combines your income with your spouse’s and allows for many deductions and credits. Both spouses must agree to file jointly.
Head of Household Filing Status
A head of household is an individual who: 1) is unmarried on the last day of the year, 2) paid more than half the cost of keeping up a home for the year, and 3) had a qualifying person living with them in the home for more than half the year (although this does not apply to dependent parents).
Qualifying Widow(er) with Dependent Child Filing Status
If your spouse died during a previous tax year, and you have a dependent child, you may qualify for the qualifying widow(er) filing status. This status provides a two-year window to transition from joint filer to unmarried filer.
JT Tax Services: Taxes Made Easy
When it comes to taxes, knowledge is power. That’s why at At JT Tax Services, we give you the peace of mind that comes with knowing that you are working with experienced professionals with in-depth knowledge of all applicable tax laws and regulations. We are located in Oxnard, California, contact us today by email (email@example.com), telephone (805-984-8890), or through our social media accounts on Facebook, Twitter, and LinkedIn to schedule a consultation or to learn more about our services.