Every year, tax time is just around the corner. In 2022, the IRS started accepting 2021 1040s on January 24th. We here at North Georgia Tax Solutions have been hard at work prepping, researching, and assisting all of our clients to prepare for this time of year. And every year, despite the last couple of years presenting a unique set of challenges, North Georgia Tax Solutions receives similar questions about filing your taxes.

One of the most asked questions we get is how your filing status will affect your taxes. What exactly is a filing status? How do I know what to file under? What if I file incorrectly? We’ve got the answers to your questions, and more.

What is a Filing Status?

There are five tax return filing status types.

  1. Single
  2. Head of Household
  3. Married Filing Jointly
  4. Married Filing Separately
  5. Qualifying Widow(er)

Your filing status is essentially the basis of what every entire tax filing rests on. Your status will determine your filing requirements, standard deduction, credit eligibility, and correct tax. Sometimes, you may fall under more than one filing status. Your filing status can be determined by answering a set of predetermined questions from the IRS. If you’re unsure of what to file under, it’s always best to seek advice from a professional, as you’ll want to be sure this step is correct before moving on to the rest of the filing process. Not to mention, choosing the right filing status can help ensure that you’ll receive the lowest taxes and the biggest refund.

Single Filing Status

This is the most basic of the filing status options. You would select Single as your filing status if you were unmarried on the last day of the tax year or have no dependents.

Head of Household

You qualify for Head of Household if you were single by the end of the tax year, paid more than half the costs of keeping up a home, and if you had a qualifying dependent or person. There are also plenty of deductions you can qualify for as a part of this tax filing status.

Married Filing Jointly or Separately

The only qualification for this status is, you guessed it, to be legally married. Whether you and your spouse decide to file together or not, one thing is true in either case; you both must choose the same filing status.

In general, filing jointly is often considered to have the lowest tax rate and be the most beneficial to the married couple. Sometimes, a married couple will file separately if they could receive a higher refund, lower taxes, or simply don’t want to be responsible for their spouse’s tax liability. Every situation is varied based on both parties’ income and tax bracket.

However, there are many intricacies to both married filing statuses, and it’s crucial to make sure that both you and your partner have checked all the boxes in order to properly file under this status.

Qualifying Widow(er) Status

If your spouse passed during the tax year, this would be the filing status to select. This tax filing status will allow you to retain the benefits of the Married Filed Jointly status for up to two years after your spouse passes away.

Of course, we could go on about what each filing status means for you and their individual tax implications. But, as a general rule of thumb, knowing how important this facet of your tax filing is, it’s best to be sure you’re doing it right the first time. Doing so could save you headaches, time, and money. Make an appointment with North Georgia Tax Solutions and get ahead of your taxes the right way!

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