What you use as your tax filing status is very important as it impacts the type of return you will be using when filing your tax return. It also determines what tax rate you will need to use. For example, if you file as head of household status, you will use the head of household tax rates.
The IRS (Internal Revenue Service) has designated 5 filing statuses for taxpayers to use. They are single, head of household, married filing jointly (MFJ), married filing separately (MFS), and qualifying widow/widower who claims a child as a dependent (QW).
In this article, we will cover all 5 filing statuses and the details about each one. This way, you can determine which filing status will yield you the greatest tax benefits.
Single
Who is eligible to file a single tax return?
To use the single tax filing status, you must be unmarried, legally separated from your spouse, or divorced. Usually, this tax filing status is reserved for single individuals who cannot claim head of household filing status. Claiming head of household is usually more beneficial, so make sure you are using the right filing status.
The single filing status means you were single on the last day of the tax year, and you don’t qualify for any other filing status. Don’t forget that you must meet the tax requirements spelled out in your state laws, too.
What are the benefits of filing single?
There aren’t many benefits to filing single. The standard deduction is the same as that for those who are married filing separately. For the 2020 tax year (the tax return you’ll file in 2021), the standard deduction is $12,400 for the single filing status.
One benefit of filing a single tax return is simplicity. Filing a single tax return is often easier than filing one with someone else. Plus, you don’t have to share your tax refund!
What are the tax rates for the single filing status?
For the 2020 Tax Year (filed in 2021), the tax rates are as follows:
PERCENTAGE | SINGLE BRACKET |
|---|---|
10% | $0 – $9,875 |
12% | $9,876 – $40,125 |
22% | $40,126 – $85,525 |
24% | $85,526 – $163,300 |
32% | $163,301 – $207,350 |
35% | $207,351 – $518,400 |
37% | $518,401 or more |
Head of Household
Who is eligible to file a head of household tax return?
The IRS explains the head of household filing status as:
“In most cases, this status applies to a taxpayer who is not married, but there are some special rules. For example, the taxpayer must have paid more than half the cost of keeping up a home for themselves and a qualifying person. Don’t use choose status by mistake. Be sure to check all the rules.”
Sounds a little unclear, right? Investopedia explains it in more detail with a little more clarity:
“To qualify for head-of-household tax filing status, you must file a separate individual tax return, be considered unmarried, and be entitled to an exemption for a qualifying person.
The qualifying person must generally be either a child or parent of the head of household.
A head of household must pay for more than one-half of the qualifying person’s support and housing costs.”
In other words, generally, you must be unmarried, filing separate income taxes from anyone else, and have a qualifying dependent that you support more than 50% of the time. You cannot claim HOH if you do not have a qualifying child or other qualifying dependent, and you cannot claim HOH if you can be claimed as a dependent on someone else’s tax return.
What are the benefits of filing head of household?
There are significant advantages in filing as head of household. The tax rates are much better than those for a single taxpayer. Plus, the standard deduction is considerably higher for HOH than that for single filing status, so you may see significant savings if you are able to file HOH.
Note that the standard deduction for HOH filing status is $18,650 (for the 2020 tax year), which is much greater than the single rate of $12,400!
Make sure when you file your tax return that you use the right filing status. Each tax filing status has its own rules and requirements.
What are the tax rates for the head of household filing status?
For the 2020 Tax Year (filed in 2021), the tax rates are as follows:
PERCENTAGE | HOH BRACKET |
|---|---|
10% | $0 – $14,100 |
12% | $14,101 – $53,700 |
22% | $53,701 – $85,500 |
24% | $85,501 – $163,300 |
32% | $163,301 – $207,350 |
35% | $207,351 – $518,400 |
37% | $518,401 or more |
Married Filing Jointly (MFJ)
Who is eligible to file a joint tax return?
If you file a married filing jointly (MFJ) tax return, you must have been married on the last day of the tax year. There is one exception; if your spouse died during the tax year, generally, you can still file a joint return.
What are the benefits of filing a joint tax return?
Filing a joint tax return is generally more beneficial than filing a separate tax return. There are more tax credits and deductions available. Plus, because the rates are better for MFJ, you usually can reduce your tax liability. After all, you don’t want to end up with an unexpected tax bill!
The standard deduction is twice that of the one for single or MFS tax filing statuses. The 2020 tax year’s standard deduction for a joint tax return is $24,800.
For the complete scoop on filing a joint tax return, please refer to this article, which explains it all in detail.
What are the tax rates for the MFJ filing status?
For the 2020 Tax Year (filed in 2021), the tax rates are as follows:
PERCENTAGE | MJF BRACKET |
|---|---|
10% | $0 – $19,750 |
12% | $19,751 – $80,250 |
22% | $80,251 – $171,050 |
24% | $171,051 – $326,600 |
32% | $326,601 – $414,700 |
35% | $414,701 – $622,050 |
37% | $622,051 or more |
Married Filing Separately (MFS)
Who is eligible to file a (married) separate tax return?
You must be married on the last day of the tax year. Even if you were divorced as late as January 2, you must file a married tax return. It’s up to you and your spouse whether you want to file separately or not. You must both file the same way.
What are the benefits of filing (married) separate returns?
If you suspect your spouse of financial mishaps, it may be in your best interest to file a separate tax return. If you are going through a divorce or are separated from your spouse, it may make things simpler if you just file separate tax returns.
Most people do not opt to file separate tax returns because the standard deduction is only $12,400 (for the 2020 tax year), which is half the rate you would get if you filed a joint return.
For all the details about whether you should file jointly or separately, please check out this article. It’s full of all the pros and cons of filing a joint or separate tax return. It’s your complete guide to filing a married tax return!
What are the tax rates for the married filing separately (MFS) filing status?
For the 2020 Tax Year (filed in 2021), the tax rates are as follows:
PERCENTAGE | MFS BRACKET |
|---|---|
10% | $0 – $9,875 |
12% | $9,876 – $40,125 |
22% | $40,126 – $85,525 |
24% | $85,526 – $163,300 |
32% | $163,301 – $207,350 |
35% | $207,351 – $311,025 |
37% | $311,026 or more |
Qualifying Widow/Widower with Child (QW)
Who is eligible to file a qualifying widow/widower tax return?
If your spouse died, you did not remarry, and you have a qualifying dependent child, you may be able to claim the qualifying widow/widower with child (QW) filing status for the two years after your spouse passed away.What are the benefits of filing as a qualifying widow/widower (QW)?
The qualifying widow/widower filing status permits you to file as though you were filing MFJ (married filing jointly). One of the benefits of filing QW is you get a much higher standard deduction than if you were filing separately. You also get a better tax bracket situation than if you had to file using the single filing status. Since the QW filing status allows you to use the MFJ tax rates, the standard deduction is $24,800 (for the 2020 tax year), which is twice what the single rate is. That’s a difference of $12,400!What are the tax rates for the qualifying widow/widower (QW) filing status?
For the 2020 Tax Year (filed in 2021), the tax rates are as follows:PERCENTAGE | QW BRACKET |
|---|---|
10% | $0 – $19,750 |
12% | $19,751 – $80,250 |
22% | $80,251 – $171,050 |
24% | $171,051 – $326,600 |
32% | $326,601 – $414,700 |
35% | $414,701 – $622,050 |
37% | $622,051 or more |
Conclusion
It’s a good idea to pick the tax filing status that will yield you the best outcome on your taxes. If you are married but can’t determine which way you should file, calculate it both ways – separately and together.
Are you concerned about which filing status to use? Need a little help? Please contact us. We are more than happy to help you find the right filing status for your taxes.
Call us for a free consultation. You can trust Indiana’s tax expert!
