Tax Filing Status
Knowing your tax filing status is very
important. The IRS will reject your tax return filing if you
file with an incorrect tax filing status. This is because each
tax filing status has different levels of tax deductions, tax
credits and tax exemptions allowed. Filing your tax return
using tax filing status that you don't qualify for may result
in larger tax deductions, tax credits or tax benefits that the
IRS will penalize. On the other hand, if a taxpayer files using
a tax filing status that is less beneficial than the tax filing
status that they qualify for, then they will owe more taxes to
the IRS than they should. While the IRS will not penalize a
taxpayer for filing using a less beneficial tax filing status,
it will not avoid an IRS audit if your tax return is
Some taxpayers mistakenly think that if they
file using the least beneficial tax filing status, don't claim
any tax deductions or tax credits and don't get any tax
exemptions, the IRS will favor their tax return and will not
audit them. This is not true. Any tax return can be audited and
yes sometimes a taxpayer is audited and gets tax refunds from
the IRS as a result of the audit. This does not happen often
but it does happen. So, file your tax return using the correct
tax filing status to avoid any problems.
There are five tax filing statuses; single, married filing
jointly, married filing separately, head of household and
widow(er) with dependent child.
If you are single, then you can file as a
single taxpayer but you may also be qualified as a head of
household if you are supporting a qualified dependent. If you
are married, then you can choose to file your tax return
separately from your spouse or file jointly with your spouse.
Filing jointly allows many more tax benefits than filing
separately. When deciding which tax filing status a taxpayer is
qualified to use, the definition of a dependent is
key because just because a taxpayer has a child does not mean
that child is considered a dependent child by the tax laws.
There are two types of qualifying dependents; qualifying child and
relative including relatives
who do not have to live with taxpayers.