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How Do I Know Which Filing Status To Use On My Tax Return?

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Since tax filing season is upon us (after waiting for the tax filing delay to be over), many people will have questions regarding which filing status to use when completing a tax return. Because of that, the IRS has given use several tips/facts that can help us to choose the proper status:

Tax Filing Status For Married Taxpayers:

  • Your marital status on the last day of the year determines your marital status for the entire year.
  • A married couple may file a joint return together. The couple’s filing status would be Married Filing Jointly.
  • A married couple may elect to file their returns separately. Each person’s filing status would generally be Married Filing Separately.

Filing Status Options For Unmarried Taxpayers:

  • “Single” generally applies to anyone who is unmarried, divorced or legally separated according to state law.
  • Head of Household generally applies to taxpayers who are unmarried. You must also have paid more than half the cost of maintaining a home for you and a qualifying person to qualify for this filing status.

Filing Status Options For Widow(er)s:

  • If your spouse died during the year and you did not remarry during 2010, you may still file a joint return with that spouse for the year of death, provided the joint return election is not revoked by a personal representative for the deceased spouse.
  • You may be able to choose Qualifying Widow(er) with Dependent Child as your filing status if your spouse died during 2008 or 2009, you have a dependent child and you meet certain other conditions.

As you can see, there are a few options available for each type of taxpayer. If you find that there is more than one option that applies to your situation, you are free to choose the one that gives you the lowest tax obligation!

If you still require more clarification, you can read more about determining your status in IRS Publication 501 (opens a PDF).

If you decide to file your own taxes, we recommend using TurboTax to do so. If you have already filed a return, you can check your tax refund status.

Be sure you are aware of the tax filing delay, as well as the fact that the tax filing deadline has been extended this year. To get the most out of your tax situation in 2011, you should know the IRA Contribution Limits, 401k Contribution Limits, and the Income Tax Rates for 2011!

photo by Arvind Balaraman

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Why You Should File A Tax Return Even If You Are Not Required!

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In a previous article, we discussed the fact that many people are not required to file an income tax return. However, there are some instances when you may want to file a tax return even though you are not required to do so.

Why You Should File A Tax Return:

Recently, the IRS gave seven reasons for doing so:

  1. Federal Income Tax Withheld – You should file to get money back if Federal Income Tax was withheld from your pay, you made estimated tax payments, or had a prior year overpayment applied to this year’s tax.

  2. Making Work Pay Credit – You may be able to take this credit if you had earned income from work. The maximum credit for a married couple filing a joint return is $800 and $400 for other taxpayers.

  3. Earned Income Tax Credit – You may qualify for EITC if you worked, but did not earn a lot of money. EITC is a refundable tax credit; which means you could qualify for a tax refund.

  4. Additional Child Tax Credit – This refundable credit may be available to you if you have at least one qualifying child and you did not get the full amount of the Child Tax Credit.

  5. American Opportunity Credit – The maximum credit per student is $2,500 and the first four years of postsecondary education qualify.

  6. First-Time Homebuyer Credit – The credit is a maximum of $8,000 or $4,000 if your filing status is married filing separately. To qualify for the credit, taxpayers must have bought – or entered into a binding contract to buy – a principal residence located in the United States on or before April 30, 2010. If you entered into a binding contract by April 30, 2010, you must have closed on the home on or before September 30, 2010. If you bought a home as your principle residence in 2010, you may be able to qualify and claim the credit even if you already owned a home. In this case, the maximum credit for long-time residents is $6,500, or $3,250 if your filing status is married filing separately.

  7. Health Coverage Tax Credit – Certain individuals, who are receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a Health Coverage Tax Credit worth 80 percent of monthly health insurance premiums when you file your 2010 tax return.

Well, there you have it…seven reasons why you should file a tax return even if you don’t have to do so.

If you have determined that you have to prepare a return, then be sure to contact us to set up an appointment for tax preparation. If you decide to file your own taxes, we recommend using TurboTax to do so.

Be sure you are aware of the tax filing delay, as well as the fact that the tax filing deadline has been extended this year. Also, you should know the IRA Contribution Limits, 401k Contribution Limits, and the Income Tax Rates for 2011!

photo by JD Hancock

To Keep Up To Date With The Latest Tax News And Regulations, Sign Up For Our Email Updates:



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