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Need help understanding different tax filing statuses?

Posted on November 8, 2018

The CPAs at Teipen Selanders Poynter & Ayres walk clients through the tax ramifications of the different tax filing statuses every day, generally when a taxpayer’s status undergoes a change due to marriage, change of living arrangements, death of a spouse, or birth of a child.

Has anything changed in your life since the beginning of 2018? Right now is an excellent time for every taxpayer to review his or her information, in case their filing status has changed. A change can most definitely affect the amount of tax owed, or even determine if a tax return needs to be filed at all.

Life can get pretty complicated. Interestingly, sometimes more than one filing status may apply to a taxpayer. When this happens, the taxpayer should choose the status that allows him/her to pay the least amount of tax. Yes, we can help you figure that out.

Here’s a list of the five filing statuses and a description of who claims them from the CPAs at TSPA:

  • Single – The status for taxpayers who aren’t married, or who are divorced or legally separated under state law.
  • Married Filing Jointly – If taxpayers are married, they can file a joint tax return. When a spouse passes away, the widowed spouse can usually file a joint return for that year.
Your CPA can help walk you through this.
  • Married Filing Separately – A married couple can choose to file two separate tax returns. This may benefit them if it results in less tax owed than if they file a joint tax return. Taxpayers frequently ask their CPA to prepare their taxes both ways before they choose the least expensive tax option. Married taxpayers can also use this status if each wants to be responsible only for his/her own tax.
  • Head of Household – In most cases, this status applies to a taxpayer who is not married, but there are some special rules. For example, the taxpayer must have paid more than half the cost of keeping up a home for themselves and a qualifying person. Your CPA can help you make sure you qualify to use this status.
  • Qualifying Widow(er) with Dependent Child – This status may apply to a taxpayer if their spouse died during one of the previous two years and they have a dependent child.

Life is complicated and changes often happen swiftly. It is well worth the time to review your tax status with your CPA now, before the end of the tax year. Let TSPA know if you need help figuring out the best course of action for you.