Filing Status Flashcards
What are the 5 types of filing statuses?
- Single
- Married filing jointly
- Married filing separately
- Head of household
- Qualified Widower with dependent
Why is filing status important?
Filing status impacts the calculation of income tax, affects the amount of the standard deduction, and determines allowance or limitation of certain credits and deductions.
Taxpayers generally considered to be unmarried for the entire year if on the last day of the tax year they were:
- Unmarried
- Legally separated from their spouse under a divorce or separate maintenance decree
Who governs whether taxpayers are married or legally separated under a divorce or separate maintenance decree?
State law governs whether taxpayers are married or legally separated under a divorce or separate maintenance decree.
Taxpayers are considered to be married for the entire year if they are what?
• They were married on the last day of the tax year, or
• The spouse died during the year and the surviving spouse has not remarried
Taxpayers can use the Single filing status if, on the last day of the tax year, they were considered what?
• Not married
• Legally separated or divorced, or
• Widowed before the beginning of the tax year and did not remarry
Can Single taxpayers qualify for another status?
What does that mean for them if they can qualify for another status?
Some single taxpayers qualify for Head of Household or for Qualifying Widow(er) with Dependent Child status, which can mean a lower tax.
What is Married Filing Jointly?
Married taxpayers who choose to file a joint return will use one return to report their combined income and to deduct combined allowable expenses.
Can married taxpayers select Married Filing Jointly even if one of the spouses did not have any income or deductions?
Yes, married taxpayers can select this status even if one of the spouses did not have any income or any deductions.
The Married Filing Jointly status can be claimed by taxpayers who, on the last day of the tax year were? (4)
• Were married and lived together.
• Were married and living apart, but were not legally separated under a divorce or separate maintenance decree.
• Were common law married pursuant to the laws of the state in which they live (or in the state where the common law marriage began) and the marriage has not been dissolved, such as by death or divorce.
• Are the surviving spouse who did not remarry before the end of the tax year (surviving taxpayer can file a joint return with the deceased spouse).
What are the responsibilities of each taxpayer on a joint return?
Both taxpayers must include all worldwide income on their joint return
Who is responsible for all the tax and any interest or penalty due on a Married Filing Jointly return?
They each may be held responsible for all the tax and for any interest or penalty due, even if all the income was earned by only one spouse.
Does a subsequent divorce relieve either spouse of the liability associated with the joint return?
No, a subsequent divorce usually does not relieve either spouse of the liability associated with the joint return.
What is Married Filing Separately status and who reports the income and deductions on their tax returns?
The Married Filing Separately status is for taxpayers who are married, and either:
• Choose to file separate returns, or
• Cannot agree to file a joint return
Taxpayers who file as Married Filing Separately each report their own income and deductions on separate returns.
Why are taxes usually higher for Married Filing Separately and give an four examples?
Special rules apply to Married Filing Separately taxpayers, which generally result in a higher tax. For example, when filing separately:
• The tax rate is generally higher than on a joint return.
• Taxpayers cannot take the child and dependent care credit, earned income credit, education credits, and certain other benefits and credits.
• Some credits and deductions, such as the child tax credit and the retirement savings contributions credit, are reduced at income levels that are half those for a joint return.
• If a taxpayer is Married Filing Separately and the spouse itemizes deductions on their return, the taxpayer must itemize and cannot take the standard deduction.
What are the 9 states that are considered Community Properties?
Are there special rules for taxpayers who live in community property states?
The income of taxpayers who lived in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin are considered community properties.
Yes, during the tax year, those who choose to file separate returns may be considered separate income or community income for tax purposes. Each state has its own community property laws, which may affect the amount of tax owed by taxpayers.
If filing jointly generally results in the lowest total tax, what are two reasons why married taxpayers may want to file separately?
- Married taxpayers sometimes choose to file separate returns when one spouse does not want to be responsible for the other spouse’s tax obligations, or because filing separately may result in a lower total tax.
- Another common reason taxpayers file as Married Filing Separately is to avoid an offset of their refund against their spouse’s outstanding debts. This includes past due child support, past due student loans, or a tax liability the spouse incurred before they were married.
For example, if one spouse has high medical expenses, separate returns may result in lower total taxes because a lower adjusted gross income allows more expenses to be deducted.
If married taxpayers want to file separately, and a potential refund offset is the reason, what form do they file to file a joint return?
Form 8379
Who is considered to be an injured spouse?
When a joint return is filed and only one spouse owes a past-due amount, the other spouse can be considered an injured spouse.
The injured spouse:
- Must not be legally obligated to pay the past-due amount, and
- Must have made and reported tax payments (such as federal income tax withheld from wages or estimated tax payments), or claimed a refundable tax credit
Both of these conditions must apply unless the injured spouse lived in a community property state at any time during the tax year.
What happens to the surviving spouse if their spouse died during the tax year?
Taxpayers whose spouses died during the tax year are considered married for the entire year, provided they did not remarry. The surviving spouse is eligible to file as Married Filing Jointly or Married Filing Separately.
What form does a taxpayer file to claim Injured Spouses status?
Form 8379
What rules apply to injured spouses who live in community states?
In community property states, the injured spouse must meet only the first condition. If the taxpayer meets these requirements, Form 8379 can be e-filed with the joint return.
What are the filing status of both parties if the surviving spouse remarries before the end of the tax year?
Surviving spouses who have remarried must file with the new spouse, either jointly or separately. The deceased spouse’s filing status becomes Married Filing Separately.
How can taxpayers qualify for Head of Household filing status?
Taxpayers may qualify for the Head of Household filing status, if they:
• Are unmarried or “considered unmarried” on the last day of the tax year, and
• Paid more than half the cost of keeping up a home for the required period of time, and
• Had a qualifying person living in their home for more than half the year (except for temporary absences, such as school)