The IRS is asking you what your status is. No, they are not asking about your Facebook relationship status, nor are they talking about your standing in the community.
Your filing status has an effect on the tax benefits you receive, the amount of your standard deduction and will impact your overall tax liability or refund.
Although most individuals file as single or choose one of the two married filing statuses, there are a total of five filing statuses on a tax return – Single, Married Filing Jointly, Married Filing Separate, Head of Household, and Qualified Widower.
By far, the status that triggers the most errors is the Head of Household status.
In order to file as Head of Household, you must be unmarried, or considered unmarried, and have paid more than half the cost to maintain a home for both yourself, and at least one qualifying person that lives in the house with you. That person would generally be your dependent as well.
The tricky part is the IRS definition of “considered” unmarried. The following must be true in order to be considered unmarried for claiming the Head of Household status:
- You file a separate return.
- You paid more than half the cost of keeping up your home for the tax year.
- Your spouse did not live in your home during the last 6 months of the tax year. Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances.
Your marital status on the last day of the year is your marital status for the entire year. If you are married on Dec. 31, you cannot file single. Married individuals can choose to file together or separate. The IRS encourages you to use the filing status that yields the best tax outcome.
The IRS has an interactive assistant on their web site called What is My Filing Status? In approximately five minutes, the tool will determine your status. If more than one filing status applies, the interview will choose the one that will result in the lowest amount of tax due.
You can also find more helpful information in IRS Publication 501, Exemptions, Standard Deduction, and Filing Information. This publication is available at IRS.gov.