Deciding how to choose your tax status seems like it should be easy. But it’s often not.
The Internal Revenue Service says filing with the wrong tax status is one of the most common errors that a taxpayer can make. Keep reading to decide which one to choose.
What Tax Status to Choose on the 1040 Tax Form
If you look at the top of the 1040 tax form, the instructions read: “Filing status. Check only one box.”
Your choices are:
— Single
— Married filing jointly
— Married filing separately
— Head of household
— Qualifying surviving spouse
Choosing the correct tax filing status is important because it determines your federal tax bracket and, ultimately, the amount of tax you pay. It also determines your standard deduction as well as whether you qualify for certain tax deductions.
Here’s what to know about each of the five filing statuses.
Single Filing Status
Who qualifies: People who are unmarried or legally separated from a spouse under a divorce or separate maintenance decree, and who don’t qualify for another filing status.
The single filing status is for single folks, as defined above, who don’t qualify for the Head of Household status. That’s likely the case if you don’t have any qualifying dependents or didn’t pay for more than half of the cost of keeping up a home for a dependent last year.
The benefit of the single tax filing status is that you could owe less tax if you earn a lot. When you get into the highest tax brackets, you might wind up in a higher tax bracket as a married couple faster than as a single taxpayer. This is known as the marriage tax penalty.
[READ: 4 Benefits of Filing Taxes Early]
Married Filing Jointly Status
Who qualifies: Married couples.
It’s usually smarter to file jointly as a married couple than separately, says Jeffrey Wood, a certified public accountant, certified financial planner and partner at Elysium, a financial and wealth management firm in South Jordan, Utah.
“There are certain tax deductions that may phase out or be lost when a couple files separately,” Wood says.
“Some common deductions such as the earned income credit, the American opportunity credit, the student loan interest deduction and the lifetime learning creditare not available to married individuals who file separately. In addition, tax rates are typically higher for individuals filing as single or married filing separately than for those who file jointly,” he says.
If nothing else, if you spend money to have somebody prepare your taxes, you’ll generally save money by having them prepare one tax form instead of two.
Married Filing Separately Status
Who qualifies: Married couples.
Occasionally it can be best for married couples to file separately, Wood says.
“If one party in the married relationship had preexisting debts that could be garnished by the IRS, the other spouse might want to file separately to protect their expected tax refund,” he says.
Another possible scenario: You and your spouse have a significant difference in income. “In this circumstance, the lower-earning spouse may want to file separately to preserve their lower tax bracket and perhaps their expected refund,” Wood says.
And yet another reason a married couple may choose to file their taxes separately: “One spouse may be a business owner and is choosing to push some risky tax positions with which the other spouse may not feel comfortable,” Wood says.
He also says the IRS considers both spouses on a joint return to be equally liable for the tax positions taken and both spouses will be on the hook for any taxes and penalties for that given tax year, even if they later separate or divorce.
Finally, if you’ve separated or are considering separating, Wood says you might consider filing separately for the tax year if it makes financial sense for both of you.
[Read: Married Couples: Is It Better to File Taxes Jointly or Separately?]
Head of Household Status
Who qualifies:Usually someone unmarried or legally separated with dependents.
This one can be confusing, but the rule of thumb is that “head of household tax filing status is chosen by unmarried taxpayers with qualifying dependents,” says Rob Burnette, an investment advisor representative, tax preparer and CEO of Outlook Financial Center in Troy, Ohio.
Burnette says that there are three qualifications you must meet to be classified as head of household:
1. You were not married on the last day of the year.
2. You paid more than half the cost of keeping up a home for the year.
3. A qualifying person lived with you in that home for more than half the year, except for temporary absences (like a college kid being away at school).
“Most of the time, qualifying dependents include children, stepchildren or foster care children. If you meet all the qualifications above, are divorced and the divorce decree gives the other parent the tax dependent status, you are likely still qualified to file HOH,” Burnette says.
You don’t have to have children living in your home to file as head of household. You could also be taking care of a brother, sister, grandparent, mother, father or another relative and claiming them as a dependent.
“HOH filing status provides a larger standard deduction and wider tax tables than single filing status, both leading to much lower tax burden for HOH versus single tax filers,” he says.
For tax year 2024, the standard deduction for HOH is $21,900 versus $14,600 for single taxpayers. This means HOH taxpayers avoid paying tax on an additional $7,300 of income.
[Read: How to Get the Biggest Tax Refund This Year.]
Qualifying Surviving Spouse Status
Who qualifies: Someone recently widowed.
This status isn’t as straightforward as it may appear as there’s a time limit on how long you can file with this status.
“If your spouse died within the year, you can still file jointly or separately as a married person for that year. After that, if you haven’t remarried and have a dependent child, you can file as a qualifying surviving spouse for up to two years,” says Joshua Zimmelman, founder of Westwood Tax & Consulting, a New York City-based virtual accounting firm, and co-founder of Levitax, a virtual tax preparation service.
There’s one main benefit of this filing status, and that’s keeping your taxes stable after the shock of having a spouse die. Filing as a qualifying surviving spouse allows you to get the same standard deduction and tax rates as married couples, Zimmelman says.
“After two years,” he adds, “your status changes to head of household or single unless you’ve remarried.”
Other Factors to Consider When Choosing a Filing Status
There are a few other things to consider when choosing a filing status.
Dates matter.You’re filing your taxes for last year and not this current year, and so the date to consider is last Dec. 31. “If you’re married on Dec. 31, you are married on your tax return,” Zimmelman says.
Likewise, if you divorced last Dec. 31, you are considered divorced for the entire year. You won’t be able to use married filing jointly for last year.
Once you file jointly, you’ll probably be stuck with that tax status for the rest of this year. That’s fine for most taxpayers. You filed your taxes and won’t file again until next year. But if you’re married and file jointly and a few months later you want to make changes to your taxes and file separately, Zimmelman says you won’t be able to change it.
“On the other hand, if you file separate returns and then later realize you should have filed jointly, you can amend your returns to file jointly within three years,” he says.
Understand the meaning of “dependent.”Understanding how the IRS defines a dependent is important for avoiding errors when filing your taxes. In a nutshell, a dependent is a taxpayer’s qualifying child or qualifying relative. Even if you feel your spouse depends on you because he or she isn’t employed or you have unequal incomes, your husband or wife is not a dependent.
To claim adult children, your child should either have been under 19 years of age at the end of the tax year, or if a full-time student, under the age of 24 at the end of the tax year. The one exception is that if you have an adult child of any age who is “permanently and totally disabled,” according to the IRS, then they can be listed as a dependent.
And if you have an aging relative living with you, among other rules, their gross income last year can’t be more than $5,050.
Hopefully, these guidelines will make it easier for you to tick the right box and maximize your tax savings.
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Tax Filing in 2025: How to Choose Your Filing Status originally appeared on usnews.com
Update 03/20/25: This story was published at an earlier date and has been updated with new information.
