Overview
One of the first considerations when you file your tax
return is designating your filing status. Although this
selection may seem straightforward, in some instances
you have choices. There are four filing statuses: single,
married filing jointly (including surviving spouses), married
filing separately, and head of household
Filing Joint Returns
Married individuals must file as either married filing jointly
or married filing separately. Marital status is determined as
of the last day of the tax year; if individuals are married on
the last day of the year, they are treated as married for the
whole year. When divorce proceedings have been initiated,
individuals are treated as still married until a final decree
of divorce has been issued; couples who are living apart
under an interlocutory decree are treated as still married.
To file a joint return, both spouses must generally be
U.S. citizens or residents for the entire year. Otherwise,
married-filing-separate status must be used. Certain
elections are available to enable filing a joint return for
a couple that wouldn’t otherwise qualify because either
spouse was not a full-year U.S. resident.
Filing Separately or Jointly
The changes introduced by the new tax law for tax years
2018–2025 have substantially reduced the impact of the
“marriage penalty” which, in certain situations, had the
effect of causing two individuals to pay more tax as a
married couple than they would have had they remained
unmarried. Under the law in effect for 2017, a couple whose
combined taxable income was in excess of $75,900 would
pay more income tax as a married couple filing jointly than
they would as two single individuals. This was because
the tax rate brackets applicable to taxable income in
excess of $75,900 for married couples filing jointly were
less than double those for single individuals. For tax years
2018–2025, the marriage penalty will only apply to couples
whose combined taxable income is in excess of $600,000.
Instead of filing a joint return, you and your spouse may
file separate returns on which you would each report only
your own income and claim only your own deductions
and exemptions. If married, you should compute your tax
liabilities both jointly and separately to determine which
method will result in less tax.
All of these factors should be taken into consideration
by married individuals in deciding whether to file jointly
or separately
Planning Tips:
Note that if you file separately, you may not claim
certain benefits, including the credit for the elderly
and disabled, the child and dependent-care credit,
and the earned income credit. Your ability to
contribute to a Roth IRA may also be limited
Filing as Head of Household
Individuals who qualify to file as “head of household” are
entitled to a higher standard deduction and lower tax rates
than individuals who file using single status, although
the difference in tax rates between single and head of
household status will be significantly less for tax years
2018–2025 than it was in previous years.
To qualify as head of household:
-
You must be unmarried (or treated as unmarried) and
not a surviving spouse at the end of the tax year.
-
Your home must serve as the principal place of abode
for more than half of the year for either an unmarried
child, grandchild, or stepchild; a married child, grandchild,
or stepchild who qualifies as a dependent; or another
relative who qualifies as a dependent.
-
You must contribute more than half of the cost of
maintaining the household, including property taxes,
mortgage interest, rent, utility charges, upkeep charges,
property insurance, domestic help, and food. These
costs do not include clothing, education, medical and
transportation expenses, vacations, or life insurance.
Filing as Surviving Spouse
If you are a widow or widower, you may file a joint return
with your deceased spouse for the year in which he or she
died, provided that you do not remarry within that year.
If you do remarry within that time, you may file jointly with
your new spouse if all other requirements are met.
Generally, a surviving spouse with dependent children is
entitled to file a return using the tax tables for joint filers
for the two years following the year in which his or her
spouse died.
