Tax Filing Status and Exemptions
Choosing the Correct Filing Status
It’s important to use the right filing status when you file your tax return because the filing status you choose can affect the amount of tax you owe for the year. It may even determine if you must file a tax return. Keep in mind that your marital status on Dec. 31 is your status for the whole year. Let’s review Tax Filing Status and Exemptions. Sometimes more than one filing status may apply to you. If that happens, choose the one that allows you to pay the least amount of tax.
The easiest and most accurate way to file your tax return is to consult a tax professional who is able to choose the right filing status based on your circumstances. Here’s a list of the five filing statuses:
- Single. This status normally applies if you aren’t married. It applies if you are divorced or legally separated under state law.
- Married Filing Jointly. If you’re married, you and your spouse can file a joint tax return. If your spouse died in 2015, you can often file a joint return for that year.
- Married Filing Separately. A married couple can choose to file two separate tax returns. This may benefit you if it results in less tax owed than if you file a joint tax return. You may want to prepare your taxes both ways before you choose. You can also use it if you want to be responsible only for your own tax.
- Head of Household. In most cases, this status applies if you are not married, but there are some special rules. For example, you must have paid more than half the cost of keeping up a home for yourself and a qualifying person. Don’t choose this status by mistake. Be sure to check all the rules.
- Qualifying Widow(er) with Dependent Child. This status may apply to you if your spouse died during 2013 or 2014 and you have a dependent child. Other conditions also apply.
Exemptions and Dependents: Top Ten Tax Facts
Most people can claim an exemption on their tax return. It can lower your taxable income, which in most cases, that reduces the amount of tax you owe for the year. Here are eight tax facts about exemptions to help you file your tax return.
- Exemptions Cut Income. There are two types of exemptions. The first type is a personal exemption. The second type is an exemption for a dependent. You can usually deduct $4,000 for each exemption you claim on your 2015 tax return.
- Personal Exemptions. You can usually claim an exemption for yourself. If you’re married and file a joint return, you can claim one for your spouse, too. If you file a separate return, you can claim an exemption for your spouse only if your spouse:
- Had no gross income,
- Is not filing a tax return, and
- Was not the dependent of another taxpayer.
- Exemptions for Dependents. You can usually claim an exemption for each of your dependents. A dependent is either your child or a relative who meets a set of tests. You can’t claim your spouse as a dependent. You must list the Social Security number of each dependent you claim on your tax return. To learn more about these rules, please call the office.
- Report Health Care Coverage. The health care law requires you to report certain health insurance information for you and your family. The individual shared responsibility provision requires you and each member of your family to either:
- Have qualifying health insurance, called minimum essential coverage, or
- Have an exemption from this coverage requirement, or
- Make a shared responsibility payment when you file your 2015 tax return.
Please call if you’d like more information about these rules.
- Some People Don’t Qualify. You normally may not claim married persons as dependents if they file a joint return with their spouse. There are some exceptions to this rule.
- Dependents May Have to File. A person who you can claim as your dependent may have to file their own tax return. This depends on certain factors, like total income, whether they are married and if they owe certain taxes.
- No Exemption on Dependent’s Return. If you can claim a person as a dependent, that person can’t claim a personal exemption on his or her own tax return. This is true even if you don’t actually claim that person on your tax return. This rule applies because you can claim that person as your dependent.
- Exemption Phase-Out. The $4,000 per exemption is subject to income limits. This rule may reduce or eliminate the amount you can claim based on the amount of your income.
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