Tax Return Filing Statuses

Your Filing Status

Whether you tied the knot – or untied it, it is important to choose the filing status that best applies to your situation. Although more than one filing status may apply to you, your tax preparer can assist you in determining which will give you the lowest tax obligation. Here's a list of filing status options.

Single (S)

This filing status may apply if you not married, divorced or legally separated.
Generally, if you don't meet the requirements of the other filing statuses, you are required to file as single.
The standard deduction is $6,200 for the 2014 tax year, with an additional $1,550 for each spouse age 65 or older, or blind.

Married Filing Jointly (MFJ)

This status may apply to a married couple who will file a joint return together.
The standard deduction is $12,400 for the 2014 tax year, with an additional $1,200 for each spouse age 65 or older, or blind.

Married Filing Separately (MFS)

This filing status may apply to married couples who file their returns separately.
If one spouse itemizes, you too must itemize your deductions.
This status may be beneficial if you want to be responsible for your own tax, resulting in a lower tax obligation than a joint return.
The standard deduction is $6,200 for the 2014 tax year, with an additional $1,200 for each spouse age 65 or older, or blind.

Head of Household (HOH)

This filing status may apply if you aren't married and have paid for more than half of the cost of maintaining a home for yourself and a qualifying person.
The qualifying person can be your dependent parent, and he/she does not have to live with you.
The standard deduction is $9,100 for the 2014 tax year, with an additional $1,550 for each spouse age 65 or older, or blind.

Qualifying Widow(er) with Dependent Child (QW)

This status may apply if you have lost a spouse, have a dependent child, and meet other conditions.
If you have not remarried, you can use this as your filing status for 2 years following the death of your spouse.
If you spouse died during the tax year, you may file a joint tax return using MFJ.
The MFJ standard deduction may apply for the 2014 tax year, with an additional $1,200 for each spouse age 65 or older, or blind.

NOTE:
Your marital status on the last day of the year determines your filing status for the tax year.
A spouse can never be claimed as a dependent, even if he/she had no income.
The names and Social Security Numbers (SSNs) of each person on your return must match those on file with the Social Security Administration (SSA). If a name is changed for any reason, it needs to be updated with the SSA.
When newly married, each spouse should review, and probably change, their Form W-4, Employee's Withholding Allowance Certificate, to reflect the change in filing status.
For federal tax purposes, the IRS will treat same-sex couples, legally married in jurisdictions that recognize their marriages, as married regardless of where they currently reside.

Children

Children may cost a small fortune, but they can bring many large tax breaks.

For tax purposes, if your child is born on December 31, they are assumed to have lived with you the entire year.
For each qualifying child, you can claim a dependent's exemption.
For each qualifying child under the age of 17, you may be eligible for up to a $1,000 child tax credit or additional child tax credits.
If you and your spouse both work or are looking for work, or if one is in school or disabled, you may be eligible for the nonrefundable child and dependent care credit for children under age 13 or for a disabled child of any age.
You may be able to take a tax credit for qualifying expenses to adopt an eligible child.
Children who are working cannot claim their own exemption if they qualify to be claimed as a dependent on the parent's return.

Home Buying or Selling

There are many write-offs when it comes to buying or selling a home.

Points paid when you purchase your home are generally deductible in that year.
Mortgage interest and real estate taxes paid on your home are deductible.
When you sell your home that you owned and lived in for two of the last five years, the profit on the sale up to $250,000 ($500,000 for married filing jointly) is not taxable.
If you have an office in your home, that portion of your home is considered business property. If you sell your home, you may be able to exclude the gain on the sale except for the amount of any depreciation claimed after May 6, 1997.

Education

You don't have to major in 'Tax Preparation' to take advantage of these education credits.

You may be able to claim the American Opportunity credit of up to $2,500 for qualified tuition and related expenses for each eligible student in the first 4 years of postsecondary education at a qualified institution. You may be able to receive up to 40% of the American Opportunity credit, even if you owe no taxes.
You may be able to claim the lifetime learning credit of up to $2,000 for qualified tuition and related expenses paid for a qualified individual(s) at an eligible educational institution. Unlike the American Opportunity Credit, the Lifetime Learning Credit is available to graduate students and covers up to 20 percent of out-of-pocket expenses up to $10,000, for a maximum amount of $2,000.
Interest on certain U.S. Savings Bonds cashed to finance higher education may be tax-free.
Taxpayers paying off student loans can deduct up to $2,500 of student loan interest as an adjustment to income.

Jobs

It's not too late to pursue your dream job … or the tax credits that may come along with it.

If job expenses are incurred and not reimbursed by your employer, you may be able to claim them as employee business expenses.
If you move to take a new job, you may be eligible to claim moving expenses.
If you change jobs, and had a pension plan (i.e., 401(k) plan) at your old job, you may be eligible to roll over the value of that plan directly into your new employer's retirement plan or into a traditional IRA.

Individual Retirement Arrangements (IRAs)

Preparing for your future may help at tax time. View our IRA Guide for more detailed information.

You may be eligible to contribute up to $5,500 ($6,500 if age 50 or older) a year to a traditional IRA. All or part of the contribution may be deductible. This money grows tax-free until withdrawn, and then the deductible contributions and earnings are taxed. If the money is withdrawn early, it becomes taxable as income and may be subject to 10% additional tax.
You may be eligible to contribute up to $5,500 ($6,500 if age 50 or older) a year to a Roth IRA. None of the contribution is deductible. This money grows tax-free and qualified distributions can be withdrawn tax-free. If the money is withdrawn early, the interest earned becomes taxable as income and may be subject to 10% additional tax.
If money is withdrawn from an IRA prior to age 59½, an additional 10% tax is assessed unless certain exceptions are met (example: buying a home for a first-time home buyer, or withdrawing to pay for qualified education or medical expenses).

Divorce

Many things may change after a divorce, especially when it comes to your taxes.

For tax purposes, if you are divorced or legally separated as of December 31, you are considered to be unmarried for the entire year.
If divorced or legally separated, your filing status is single unless you qualify to file as head of household.
The custodial parent, or the parent with whom a dependent child lives, does not lose the head of household filing status by allowing the non-custodial parent to claim the exemption for a dependent child.
When newly divorced, be sure to change your Form W-4, Employee's Withholding Allowance Certificate, to reflect your new filing status. If your name has changed, be sure to notify the Social Security Administration (SSA) as well. The IRS will delay processing your tax return if the name does not match what the SSA has in their files.

Retirement

The following tax information will help you live out your retirement prepared for taxes.

Pensions and annuities are generally taxable when distributed.
Normally, you must start withdrawing from a traditional IRA by April 1 of the year following the year you reach age 70½.
If one-half of your Social Security benefits plus your other income exceeds $32,000 for married filing jointly, or $25,000 for all other filing statuses (except married filing separately and you lived with your spouse at any time during the year), a portion of your benefits may be taxable. For married filing separately and living with spouse at any time during the year, the base amount is $0.
If you are age 65 or over, and are below certain income limits, you may be eligible for the nonrefundable credit for the elderly or the disabled.
When receiving a pension, be sure to have taxes withheld, or you may need to make quarterly payments using Form 1040-ES, Estimated Tax for Individuals. That way, you will not owe too much tax at the end of the year and become subject to the penalty for underpayment of estimated tax.

Gifts and Inheritance

Know the stipulations and limits on receiving gifts and other inheritance.

Property received as a gift retains the basis of the donor.
Inherited property receives a stepped-up basis to the fair market value (FMV) of the property on the date of the decedent's death.
Certain inherited property, such as IRAs and pensions, are taxable or have a portion that is taxable when distributed to the beneficiary.
In 2014, an individual can give up to $14,000 (money or property) during the year to any other individual tax-free. The person receiving the money or property does not have to report the gift as income. For any amount over $14,000 given to a single individual, the donor must file a gift tax return and any gift tax is the donor's responsibility.

Death

Losing a loved one is never easy. Ellis Income Tax hopes to ease the burden by providing this tax information.

The same filing requirements that apply to individuals determine if a final income tax return must be filed for the decedent. The personal representative must file the final income tax return of the decedent for the year of death and any returns not filed for preceding years.
The surviving spouse can file married filing jointly for the tax year in which the spouse has died. The surviving spouse may file as a qualifying widow(er) for 2 years following the death of the spouse if unmarried and have a dependent child.
An estate tax return may also need to be filed.

Refer to our Tax Glossary for a complete list of definitions and explanations of commonly used tax terms.