Choosing the Right Tax Filing Status

Choosing the Right Tax Filing Status


Filing status is determined on the last day of the year and most often is based on marital status. The two most prevalent are as follows:

Single – Unmarried individuals without dependents.

What is Married Taxpayers Filing Jointly (MFJ)? 

The couple combines their incomes, deductions, and credits on a jointly filed return. They are jointly and separately liable for the tax determined on the return. Because filing status is based on the taxpayers’ marital status on December 31 of each year, this means that couples who marry during the year, regardless of the date of the marriage, are eligible to file MFJ (but a special rule applies for nonresident aliens – see below). Likewise, those who divorce during the year are not qualified to file MFJ for the year when the divorce is made final. A couple that is separated but still married as of December 31 may file either MFJ or Married Filing Separate (or possibly Head of Household, as explained below), and neither spouse can file using the single status. 



See Relax Tax’s Amending a Tax Return at


But single and MFJ are just the tip of the iceberg when it comes to determining the proper and most beneficial filing status. There are a number of possibilities: 

Qualified Widow (er) / Surviving Spouse

 In the year of a spouse’s death, the surviving spouse, if not remarried by the end of the year, can use the MFJ status. In the two subsequent years, if not remarried, the surviving spouse may be able to file as a Qualified Widow(er). The benefit of filing as a Qualified Widow(er) is that the taxpayer gets to use the MFJ tax rates, which are lower than those for the Single and Head of Household statuses. To file as a Qualified Widow(er), the taxpayer must meet the following requirements:

  1. The taxpayer must have a son, daughter, stepson, or stepdaughter (no age limits) – but not a foster child and not a grandchild – who can be claimed as a dependent, either as a qualified child or a dependent relative, except that the child’s gross income is disregarded for purposes of determining if the child is a dependent. 
  2. The child cannot have filed a joint return. 
  3. The taxpayer cannot be claimed as someone else’s dependent. 
  4. The child must have lived in the taxpayer’s home all year, except for temporary absences or if a child was born or died during the year or was kidnapped. 
  5. The taxpayer must have paid more than half the cost of keeping up the home for the year. 




Married to a Nonresident Alien

Generally, a U.S.citizen or a U.S. resident who is married to a nonresident alien must file as Married Filing Separate. However, a person who is a nonresident alien at the end of his or her taxable year and who is married to a U.S. citizen or a U.S. resident can be treated as a U.S. resident for income tax purposes, if the spouses so elect.  In doing so, both spouses must agree to subject their worldwide income for the taxable year to U.S. taxation, and both parties must make the election. 



See this related post from Dennis Harabin: 3 Things To Know Before Getting Married 
Getting married has an impact on your tax filings as to which brackets you are going to fall in. There are ways that you can move the finances between your husband or your wife but the big thing to understand is - you need to be all in or not.




Head of Household Tax (HH)

This status may be claimed by a single or married individual meeting certain requirements. While the status provides favorable tax rates, it is frequently used in error, often because the taxpayer doesn’t understand the eligibility rules. Of all of the statuses, the head of household is the only one in which a paid tax preparer is subject to a penalty if they do not perform the IRS-prescribed due diligence when determining if their client qualifies to claim HH. It is also closely monitored by federal and state tax agencies. 


Who Can Claim Head of Household?

A single (unmarried) individual may use this status if he or she

  1. Pays more than one-half of the cost of maintaining, as his or her home, a household that is the principal place of abode of a qualified person for more than half of the year. A qualified person generally includes a qualified child (the child’s exemption does not have to be claimed – it can be released to the other parent) or a relative for whom the taxpayer may claim a dependency exemption, OR
  2. Pays more than half the cost of maintaining a separate household that was the main home for a dependent parent for the entire year. 

A married individual may use this status if he or she  

  1. Lived apart from their spouse for at least the last six months of the year, and
  2. Pays more than one-half of the cost of maintaining, as his or her home, a household that is the principal place of abode, for more than half the year, of a child, stepchild, or eligible foster child for whom the taxpayer may claim a dependency exemption. 




Other Head-of-Household issues:

  • Generally, a single house cannot contain more than one household. 
  • For HH purposes, “temporary absences” for school, vacations, illness, military service, etc., do not change the place of a dependent’s abode. 
  • A person claimed as a dependent under a “multiple support agreement” does not qualify a taxpayer for the HH filing status. (When several people together provide over 50% of support for an individual, those providing more than 10% of the support can have a multiple-support agreement that specifies which of them will claim the dependent.) 
  • A married child (including a grandchild, stepchild, or adopted child) who is a dependent will qualify a taxpayer for this filing status. But to be a “qualifying child,” the child cannot file a joint return unless the return was filed only as a claim for a refund.


See this related post from Dennis Harabin: The Benefits of Filing a Tax Return
These days the tax return is used for more than just collecting taxes. It has also become a tool for the government to provide social benefits. This article discusses the various reasons and resulting benefits available to you when you file, even if you are not required to, as you may be eligible for a refund of withholding or estimated payments or a refund as a result of a refundable tax credit or even a stimulus payment that you didn’t previously receive.


Married Filing Separate (MFS) 

Married taxpayers have the option of filing a joint return or separate returns. Generally, if the income, deductions, and credits are split exactly 50-50, the total tax when filing separate returns will be the same as a joint return. However, some credits and deductions may not be allowed when filing MFS. These are the most common reasons for filing MFS.

  1. They may be separated and may not wish to file jointly. However, this creates complicated issues in dividing up the income and deductions because the spouses are often uncooperative. In some states, community property laws can also add complications in dividing the income and deductions. 
  2. They may wish to keep their financial affairs separate. This most commonly occurs when individuals marry later in life, or when one spouse comes to the marriage with significantly greater wealth than the other spouse, and they wish to keep their finances separate, even if doing so costs them some extra taxes. 
  3. A spouse may be concerned that the other spouse is not properly reporting their income or deductions. When a joint return is filed, both spouses are liable for the tax, even if only one spouse earned the income.


See this related post from Dennis Harabin: Filing Taxes After Divorce: What You Should Know
If you are recently divorced or are contemplating divorce, you will have to deal with or plan for significant tax issues such as asset division, alimony, and tax-return filing status. If you have children, additional issues include child support; claiming of the children as dependents; the child, child care, and education tax credits; and perhaps even the earned income tax credit (EITC). 



Generally, there is no tax benefit to filing MFS except if the taxpayer is married to a non-resident spouse.   

Feel free to reach out with any questions or concerns regarding your tax filing status. Contact our office at 551-249-1040 to talk things over. 



Does this sound too complicated? Dennis Harabin at Relax Tax makes it easy to understand.


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