Your tax filing status dictates your tax brackets, standard deduction amount, and eligibility for many other deductions and credits. Selecting the correct filing status is especially important for divorced individuals or surviving spouses.
Filing Statuses – There are five options.
1. Single
Claim Single as your filing status if the following statements were true on the last day of the tax year:
- You were not married.
- You were legally separated according to your state law under a decree of divorce or separate maintenance. BUT if, at the end of the tax year, your divorce wasn’t final, you are considered married and cannot claim Single status.
- You were widowed before the beginning of the tax year and didn’t remarry before the end of the tax year. Exemption applies if you have a child. See Qualified Surviving Spouse filing status.
2. Married Filing Jointly (MFJ)
Claim MFJ if you were married on the last day of the tax year.
- Typically, income tax is less if you file married joint versus married separate because the tax brackets are expanded.
3. Married Filing Separately (MFS)
Claim MFS if you were married on the last day of the tax year but choose to file separate tax returns.
- Generally, if you file a separate return, you report only your own income, deductions, and credits. However, different rules apply to people in community property states, like Wisconsin. Taxpayers in community property states must report half of all community income and all his/her separate income.
- Typically, income tax is larger if you file married separate versus married joint because certain deductions and credits are not available to MFS taxpayers, and the tax brackets are condensed.
- Married taxpayers may choose to file separately for student loan income-based payment plans.
4. Head of Household (HH)
Claim HH if ANY of the following apply:
- Unmarried at the end of the tax year and you provided a home for a dependent person (child or relative) during the tax year.
- You are married but lived apart from your spouse for the last 6 months of the tax year, file a separate return from your spouse, paid over half the cost of keeping up your home which was the main home of your child, stepchild, or foster child more than half of the year AND you can claim this child as your dependent.
- You are married to a nonresident alien at any time during the year and the election to treat the alien spouse as a resident alien is not made.
- This filing status is typically selected by divorce individuals with dependent children.
- This filing status provides better tax brackets and deductions than the Single filing status.
5. Qualified Surviving Spouse
Claim QSS if ALL the following apply:
- Your spouse died during the tax year (or during the previous 2 tax years), and you didn’t remarry before the end of the tax year;
- You have a child or stepchild whom you can claim as a dependent;
- This child lived in your home for all of the tax year;
- You paid over half the cost of keeping up your home; AND
- You could have filed a joint return with your spouse the year he or she died.
- In the year of death, the surviving spouse will select the married filing joint status. The qualified surviving spouse status will apply for the 2 tax years subsequent to death.
- This filing status provides tax brackets and deductions similar to the married filing joint filing status.