How you file your taxes is typically determined by your marital status at the end of the year, and whether or not you have dependents who rely on you to provide housing. There are five separate statuses that you can use to file a tax return: single, married filing jointly, married filing separately, head of household, and qualifying widow(er).
Married couples have the option of filing a tax return either together or separately. If you are married, but lived separately from your spouse for the last six months of 2014 and your child stayed with you, there’s a possibility you can file as head of household. This status can grant you a better tax rate than if you filed as married filing separately, so it can be extremely beneficial for married taxpayers in these situations.
Unmarried taxpayers are typically categorized as single, unless they meet all the requirements to file as head of household or qualifying widow(er). Head of household requires that you’ve paid over half of the expenses related to maintaining a home for yourself and a dependent child or qualifying relative who has lived in the home. Dependent parents don’t have to stay in your home in order for you to claim head of household status.
This year, qualifying widow(er) status applies to any taxpayer whose spouse died in 2012 or 2013, and the taxpayer was responsible for more than half of the costs of keeping a home for the dependent child and themselves. Both qualifying widow(er) and head of household status offer better tax rates for those who are eligible than just filing using the single status.
It’s important to choose the right filing status because it affects the deductions, exemptions, and credits you are allowed to take. Additionally, it determines the rate at which your income is taxed, and the amount of the standard deduction you can take should you choose not to itemize. For instance, married couples are only able to claim certain benefits if they file jointly, though they may find they have a greater list of deductions overall by filing separately.