Your tax filing status may seem like a simple box to check, but it can have a bigger impact on your return than many people realize. It affects how much of your income is taxed, the size of your standard deduction, and whether you qualify for certain credits and deductions. In some cases, choosing the right status can lower your tax bill without changing anything else about your finances.
That is why this decision deserves a closer look.
The Five Tax Filing Statuses
The IRS recognizes five main filing statuses. While the categories are fairly straightforward, the right choice depends on your family, household and financial situation.
Single: This status generally applies if you are unmarried as of the last day of the year and do not qualify for another filing status.For many people, this is the default. But it is worth confirming that another status, such as Head of Household, does not apply if you are supporting a child or another qualifying person.
Married Filing Jointly: This status applies to married couples who file a single tax return.For many couples, this is the most beneficial option. It often provides access to more favorable tax treatment, as well as eligibility for certain deductions and credits that may be limited when filing separately.Still, it is not always automatic. In some cases, it may make sense to compare this option with Married Filing Separately before filing.
Married Filing Separately: This status allows married couples to file separate tax returns.Some couples choose this for legal or financial reasons. In other situations, one spouse may benefit from filing separately if they have deductions that are tied to income.That said, filing separately often comes with trade-offs. Certain deductions and credits may be reduced or unavailable, so this option should usually be chosen carefully rather than by default.
Qualifying Surviving Spouse: This status may apply for a limited time after the death of a spouse if you have a dependent child.It can allow you to continue using the same tax rates generally available to married couples filing jointly for a temporary period. This can provide some financial relief during an already difficult transition.
Head of Household: This status can be especially valuable, but it is also one of the most misunderstood. Head of Household may apply if you are unmarried and pay more than half the cost of maintaining a home for a qualifying person. If you qualify, this status may offer a larger standard deduction and more favorable tax treatment than filing as Single. Because the rules are more specific than many realize, this is one area worth a closer look.
A Closer Look at Head of Household
The Head of Household status is often overlooked, so it is worth understanding who may qualify. In general, you must meet three main requirements:
1. You are considered unmarried at year-end
This usually includes people who are single, divorced, or legally separated. In some cases, a married person who lived apart from their spouse for the last part of the year may also qualify.
2. You paid more than half the cost of maintaining your home
This generally includes rent or mortgage payments, property taxes, utilities, groceries, and home maintenance. Personal expenses such as clothing, medical care, or vacations do not count toward household costs for this purpose.
3. You have a qualifying person
This is where the rules become more detailed.
A qualifying person often includes:
- A child who lived with you for more than half the year
- In some cases, a parent you financially support, even if they do not live with you
- Certain other relatives who meet IRS dependency rules
A few common examples that may not qualify:
- Living with a partner who is not your dependent
- Supporting someone financially without being able to claim them as a dependent
- Sharing custody of a child who did not live with you for more than half the year
Because the details matter, this status is one people should be especially careful about claiming correctly.
Your filing status may look like a simple box on your tax return, but it can have a meaningful impact on the outcome. Because life changes can affect which status applies, this is not a decision to put on autopilot, even if nothing seems to change at first glance.
Before you file, make sure your status still reflects your current household and financial situation. Doing so can help you avoid errors, preserve valuable tax benefits, and identify planning opportunities you may have overlooked. Your financial advisor and tax professional can help you evaluate the options and choose the approach that best fits your situation.
IMPORTANT DISCLOSURES: The information provided is based on internal and external sources that are considered reliable; however, the accuracy of this information is not guaranteed. This piece is intended to provide accurate information regarding the subject matter discussed. It is made available with the understanding that Benjamin F. Edwards is not engaged in rendering legal, accounting or tax preparation services. Specific questions on taxes or legal matters as they relate to your individual situation should be directed to your tax or legal professional.