The IRS uses your filing status to decide your filing requirements, tax rate, eligibility for certain deductions and credits, and standard deduction amount. Thus, determining yours plays a key role in tax preparation. Selecting the wrong one could end up increasing your tax liability, and in some cases, result in an audit. Here are a few tips to help ensure you get it right.

How to Choose Your Tax Return Filing Status 

1. Learn the Different Status Types

The IRS provides five types of filing status to choose from, which include single, married filing jointly, married filing separately, head of household, and qualifying widow(er) with dependent child.

While many of these may seem self-explanatory, others may involve some research. For example, children can be deemed “dependent” if they are 18 or younger (or a full-time student under 24), they live with you for more than half the year, and you provide more than half of their financial support.

You may file as head of household if you’re not married but have covered more than half the cost of maintaining a home for a qualifying dependent.

2. Consider Recent Family Changes 

Major life events can also impact your filing status. For example, you can mark yourself as “single” if you were legally separated, divorced, or widowed by December 31^st of the filing year. If you get married by December 31^st of the filing year, you are considered married for the whole tax year and may select married filing jointly. Married couples can also decide to file separately.

If your spouse passed away within the last two years, you have a dependent child, and you’ve not remarried, you can declare qualifying widow(er) status.

3. Compare Your Options 

Often, taxpayers qualify for more than one kind of status. If this is the case, you want to compare your options carefully before deciding which one to go with. It’s best to work with a tax preparation professional who can help you do calculations for all applicable scenarios. This will allow you to see which status provides you with the lowest tax bill and highest return. 

If you have any questions regarding your tax filing status, turn to PMC Tax Services LLC for help going over your options. For more than 30 years, they’ve provided residents throughout Lincoln, NE, and across the state with meticulous tax preparation services. Call (402) 467-5529 to schedule an appointment, or visit their website for more information on how they can assist you this season.