Key Takeaways:

• Your filing status determines your tax bracket, deductions, and credits.
• There are five tax filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household, and Qualifying Widow(er) with Dependent Child.
• Choosing the correct filing status ensures you take advantage of the right deductions and credits.
• Your filing status can change year to year based on your marital and living situation.
• If your spouse died during the tax year, you may qualify for Qualifying Widow(er) with Dependent Child status.
• Common law marriages are recognized in certain states, allowing couples to file as Married Filing Jointly.
• Only the custodial parent can claim Head of Household status for tax purposes.

If you work for a living, you’re probably required to file a tax return. One of the first decisions you make when you file your tax return is determining your filing status – and if you have no idea what that means, we got you! In this post, we’re going to focus on your filing status and why it matters on your tax return. Choosing the correct filing status  determines your tax bracket, eligibility on certain deductions and can help you optimize the outcome of your tax bill.

Understanding the different tax filing statuses

Taxes are complicated and selecting your tax filing status is no exception. One of the first decisions you make when you prepare your tax return is your filing status. Your filing status is basically the government asking your legal marital status and whether or not you have dependents. Your filing status can change year-over year and there are five tax filing statuses to choose from.

Single Filer

The single filing status is for individuals who are not married or are legally separated. Single filers typically have fewer tax benefits compared to other filing statuses, but it’s the default status for those who don’t qualify for any other category. You have to be legally single or separated on the last day of the year (12/31) to claim this filing status.

Married Filing Jointly 

Legally married couples have the option to use the married filing jointly status, combining their incomes and deductions on one tax return. This status offers certain advantages, like lower tax rates and eligibility for increased deductions and tax credits. You have to be legally married on the last day of the year (12/31) to claim this filing status.

Married Filing Separately

Married couples also have the option to file separately, where each spouse reports their own income and deductions on separate tax returns. It’s important to note that this status often comes with certain disadvantages, including higher tax rates and limitations on certain deductions, like only being allowed to deduct the amount of interest you paid. In most instances, married filing separately is less favorable than filing jointly.

Head of Household

The head of household filing status is for unmarried individuals who provide a home for a qualifying dependent, such as a child or relative. To claim this status, you must be unmarried on the last day of the tax year, pay more than half the cost of maintaining a home, and have a qualifying dependent living with you for more than half the year. Head of household status generally offers more favorable tax rates and higher standard deductions compared to filing as single.

Qualifying Widow(er) with Dependent Child

This filing status is available to individuals who have lost their spouse within the past two years and have a dependent child. To claim this status, you must meet certain criteria, including being unmarried and having a dependent child. Qualifying widow(er) status allows you to use the same tax rates as those who are married filing jointly for the two years following your spouse’s death, which can result in lower taxes.

Why your tax filing status is important

Your filing status is important because it determines the tax rates, deductions and credits available to you when you file your tax return. The IRS and state tax authorities have different rules and benefits associated with each filing status — but in both instances, choosing the correct tax status ensures that you are taking advantage of the right deductions to lower your taxable income.

Selecting the wrong filing status can result in underpaying or overpaying taxes, potentially leading to penalties or missed opportunities for deductions and credits that can have a huge impact on your tax liability.

How to choose your tax filing status

Choosing your tax filing status can be relatively simple in most instances. Start with asking yourself two simple questions:

• What’s your marital status? Are you single, married, legally separated, or widowed?
• Are you in charge of a qualifying person, like a dependent child or dependent parent?

Marital Status

Your marital status may not always be so simple. If you are legally separated, your spouse died or you live in a state that recognizes common law marriages, determining the correct tax filing status may be more nuanced.

Being a Caretaker

If you are not married but are responsible for a qualifying person (like dependent children, parents or siblings), the government has a filing status that gives an opportunity for increased deductions and more favorable tax rates. Claiming head of household as the caretaker for a qualifying individual can make a difference in your tax liability.

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Filing Status and Withholdings

When you start a new job and you fill out your new hire paperwork, you will have to fill out Form W-4. This is the form that tells your employer how much to withhold from every paycheck and might ask you to choose a tax filing status and elect to “claim 1, 2 or 0.”

To keep it simple, you can fill out your W-4 to match the filing status you use on your income tax return and you can “claim” a number to match the amount of dependents you report on your tax return.

However, the filing status and what you “claim” on the W-4 simply equates to a percentage of your income to be withheld — so what you choose doesn’t necessarily have to match the tax status on your tax return.

Here’s an example: 

Liz Lemon files a joint tax return with her partner. They both work and don’t have dependents, so their income taxes are usually pretty high. Liz and her partner want to make sure they don’t owe the government when they files their tax return, so she would prefer to withhold a higher percentage, or get more taken out of every paycheck to cover the tax bill. She may fill out Form W-4 as Single and Claim 0, which may equate in the highest withholding rate, even though she will file a joint tax return.

The TL;DR: your filing status doesn’t have to match your withholding elections but it can be a good starting place. The Form W-4 can be updated at any time with your employer to account for any life changes — so if you “claimed 0” but didn’t really know what it meant, don’t sweat it. After reading this post, you can ask your employer to make a change.

Tax Filing Status FAQs

My partner and I live together but are not married. Can we file jointly?

No, you cannot elect married filing jointly if you are not legally married. Filing status options for unmarried couples living together are typically “Single” or “Head of Household” if you meet the criteria.

Can I change my filing status each year?

Yes, you can change your filing status each year based on your marital and living situation. However, you must choose the filing status that accurately reflects your situation for that particular tax year.

What if I am legally separated?

If you are legally separated according to the laws of your state, you generally have the option to file as “Married Filing Separately” or “Head of Household” if you meet the requirements for the latter. Please check with your state or an attorney to be compliant with your state’s laws. 

What if my spouse died?

If your spouse passed away during the tax year, you may be eligible to file as “Qualifying Widow(er) with Dependent Child” for the two years following their death, provided you meet specific criteria. This status allows you to use the same tax rates as those who are married filing jointly.

What is my filing status if I have a common law marriage?

If you live in a state that recognizes common law marriage, and you meet the state’s requirements for a common law marriage, you can typically file as “Married Filing Jointly” for both federal and state tax purposes. Please check with your state or an attorney to be compliant with your state’s laws.

I am the custodial parent – can my child’s non-custodial parent also claim Head of Household?

No, only the custodial parent who meets the requirements can claim the “Head of Household” status. Generally, the custodial parent is the one with whom the child lives for the majority of the year and who provides more than half of the child’s financial support.