Tax Filing Statuses: A Complete Guide

The five primary tax filing statuses are shown below. Each status has its own rules, benefits, and applicable tax brackets. We will look at them one by one to determine which status applies to you and how to use this information to better your tax situation.

The single filing status is for unmarried (including divorced and legally separated) people who don’t qualify for other filing statuses.

The standard deduction for single filers is lower than other statuses like married filing jointly or head of household. For the 2023 tax year 2023, for example, the standard deduction for a single filer is $13,850.¹ While this amount does help reduce taxable income, it’s less advantageous than the deductions available under other statuses.

Single filers may also be eligible for tax credits, but these are generally less substantial than those available to filers with dependents or those filing jointly. Credits like the Earned Income Tax Credit (EITC) can still be claimed,² but the benefits are scaled based on income and family size.

For high-income individuals, filing single can sometimes lead to lower taxes due to how tax brackets are structured. This is often referred to as the “marriage penalty.” It causes some married couples filing jointly to pay a higher tax rate than if they both filed single.

Filing single also simplifies the filing process since you don’t need to coordinate with another person’s finances. For those with no dependents and a simple tax situation, the single filing status is often the most appropriate and efficient choice.

The head of household filing status is for unmarried individuals who bear the primary financial responsibility for maintaining a home. To qualify, you must have paid more than half the costs of home upkeep for the year and provided the majority of support for at least one other person for over half of the year. Qualifying costs include mortgage or rent, utilities, property taxes, maintenance, insurance, and other household expenses.

Eligibility for the head of household filing status is not based on who earns the most in the family. Instead, the IRS stipulates that it’s specifically for those not legally married or considered unmarried because their spouse did not live in their home during the last six months of the tax year.

To qualify for the head of household status, you need to financially support a “qualifying person,” generally a child under 19 years old (or under 24 if they’re a student) who lives with you for more than half the year. A qualifying person can also be your parents (even if they don’t live with you) or other relatives like siblings and in-laws that you financially support.³

Filing as a head of household can have big financial benefits. For 2023, head of household filers get a standard deduction of $20,800,¹ significantly more than the $13,850 standard deduction for single filers. You’ll also generally find yourself in a lower tax bracket (even with the exact same income) than single filers, which can save you thousands of dollars a year on taxes.

The married filing jointly status is commonly used by married couples and involves combining both spouses’ income, deductions, and credits into a single tax return. Even if one spouse doesn’t have income or deductions, they can still file jointly.

Filing jointly can result in a lower tax bill compared to filing separately. The standard deduction for married filing jointly is higher. Couples can access certain deductions and credits unavailable to those who file separately. This can lead to significant tax savings and is a major reason why many married couples opt for this filing status.

When filing jointly you and your partner have a shared responsibility. Both spouses are equally liable for the taxes owed, including any interest or penalties that might accrue. This means you could be held accountable if your spouse makes an error or fails to pay.

In the case of a divorce, the IRS considers you unmarried for the entire year if you’re legally divorced by December 31st. This means you cannot file a joint return for that year. However, if your spouse passes away during the tax year, you can file jointly and still considered married for the entire year.

Head of household vs married filing jointly

The head of household filing status suits unmarried individuals who’ve paid over half the annual home expenses and provided primary support to a qualifying person for over half the year. It offers a higher standard deduction and lower tax rates than the single filing status, benefiting single parents, divorcees, or those legally separated.

Married filing jointly allows married couples to combine income, deductions, and credits into one return. For married and cohabiting couples, married filing jointly is usually the best filing status.

The married filing separately status is suitable for married high earners or those with a partner with prior tax complications. If you’re just entering a marriage (or just exiting one), filing separately can be a smart choice.

Married filing separately filers are subject to different tax brackets than single filers, and both spouses must agree on the status. It’s worth noting that this status can lead to complications in determining which deductions each spouse should claim.

Filing separately often results in higher tax payments than filing together due to restrictions on deductions and credits. These restrictions impact deductions for student loan interest, the Earned Income Tax Credit, child and dependent care expenses credits, and more.

However, filing separately has potential advantages, like reducing monthly payments for individual income-based student loan repayment plans.

It may also make sense to file separately when one spouse has significant out-of-pocket medical expenses that would be ineligible for deduction (either wholly or partially) if you filed together.

Married filing jointly vs separately

When deciding whether to file taxes jointly or separately as a married couple, the choice depends largely on your circumstances.

Married filing jointly is often the most beneficial in terms of tax savings. This filing status offers a higher standard deduction, access to certain tax credits, and more favorable tax brackets. Couples who file jointly can potentially deduct a larger amount of their income and qualify for various tax benefits that aren’t available to those who file separately.

With that said, married filing separately can also be advantageous in specific situations:

• When one spouse has significant student loan debt under an income-driven repayment plan, filing separately could result in lower monthly loan payments, as the payment would be based solely on their income, not the combined household income.
• When one spouse has substantial medical expenses, miscellaneous itemized deductions, or other individual deductions that would be limited by a higher adjusted gross income.
• If there’s a need to separate tax liabilities, like when one spouse has concerns about the accuracy of the other’s tax return, or there are unresolved tax issues.
• If you’re separated but not yet legally divorced and your finances are being managed separately.

Still, filing separately often leads to a higher tax bill overall. Restrictions on tax credits, deductions, and benefits – like the Earned Income Tax Credit, education tax credits, and child and dependent care credits – should play a significant role in your decision.

Qualified widow(er) is a tax-filing status for people who have recently lost a spouse and are supporting a child at home. It’s designed to provide a period of financial relief during challenging times.

To qualify for this filing status, you must have a dependent child who lives with you and cover more than half of the household expenses for the year. The child must have been living with you at the time of your spouse’s death.

If your spouse passed away during the tax year and you were eligible to file as married filing jointly (even if you didn’t actually file jointly), you can still file jointly for the year of your spouse’s death. You can file as a qualified widow(er) for the next two years after that.

Filing as a qualified widow(er) allows you to enjoy tax benefits similar to the married filing jointly status, including a higher standard deduction and more favorable tax brackets compared to the single filing status.

Choosing the right tax filing status is more than just a box to check on your tax return; it’s a strategic decision that can significantly impact your financial well-being. By understanding the different statuses and considering your personal circumstances, you can ensure you’re not leaving money on the table come tax time.

If you need more guidance when filing your taxes, take a look at our tax preparation checklist.

What is the penalty for filing single when married?

Filing single when you’re legally married can lead to serious consequences from the IRS. Misrepresenting yourself can result in underpaying your taxes, which could lead to penalties and interest charges on the unpaid amount. The IRS can reassess your taxes based on the correct filing status, impose additional fines, and, in some cases, take legal action against you for tax evasion.

When is it better to file married separately?

Filing separately as a married couple can be beneficial in certain situations. For example, if one spouse has significant medical expenses, student loan payments, or other miscellaneous deductions, filing separately can maximize these deductions. Also, if there are concerns about your spouse’s tax liability or the accuracy of their return, filing separately can protect you from potential tax debts or penalties. However, filing separately usually results in a higher overall tax bill, so it’s advised only in specific situations.

What does filing jointly mean?

Filing jointly means a married couple combines their incomes, exemptions, deductions, and credits on a single tax return. Filing jointly can result in a lower tax bill than filing separately, though it doesn’t always. Joint filing is a common choice for married couples due to the potential financial benefits and the relatively simple tax filing process.