 |
|
What's my filing status?
|
One of the first things you'll need to do when preparing your
tax
return is to choose the proper filing status. Your filing status is based upon your
marital and family situation. Your filing status will determine which tax rates apply to
your taxable income. Under our graduated income tax system, as your income rises, not only
does your total tax bill go up, but the percentage of tax that your additional income is taxed at
also increases. The lowest percentage of tax the IRS claims is 10% - the highest
percentage of tax the IRS claims is 35%
(not including phase-outs, etc.). Your filing status also determines the total standard
tax deduction(s) you can claim on your tax return. The filing statuses are Single, Married Filing Jointly,
Married Filing Separately, Head of Household, and Qualifying Widow or Widower.
If more than one filing status applies to you, you may choose the one that will give
you the lowest tax on your tax return. You should review the Tax Rate Schedules below for the various filing
statuses.
|
|
|
| Below are the tax rate
schedules. By using the appropriate schedule for the taxpayer's filing
status you can determine the taxpayer's tax bracket. The tax brackets are
adjusted each year for inflation. If the inflation rate in 2010 is 5%, the 15% bracket for
2010 will be increased by 5% - rounded down to the nearest $50.
The taxpayer's tax bracket is
the amount of tax that the taxpayer pays on his "top dollar" of income. The actual tax
rate that the taxpayer pays on his taxable income below his "top dollar" is less because
the tax rates are graduated and because they are applied to the taxpayer's taxable income after
deductions and exemptions. The taxpayer may also be entitled to tax credits
against any tax due. Determine the
taxpayer's taxable income from Form 1040
Line 43 and in the far left column of the appropriate schedule for the
taxpayer's filing status
locate his income bracket. The percentage figure in the third column to the right
titled "The tax is:" shows the taxpayer's tax bracket.
CAUTION: You should only use the
schedules below to determine the taxpayer's tax
due if the taxpayer's taxable income (Form 1040, Line 43) is $100,000 or more.
Even though you cannot use the
tax rate schedules below if the taxpayer's taxable income is less than $100,000, all levels of taxable
income are shown so you can see what the taxpayer's tax bracket is. |
| Schedule X Single |
| If taxable income is over-- |
But not over-- |
The tax is: |
| $0 |
$8,350 |
10% of the amount over $0 |
| $8,350 |
$33,950 |
$835.00 plus 15% of the amount over
$8,350 |
| $33,950 |
$82,250 |
$4,675.00 plus 25% of the amount
over $33,950 |
| $82,250 |
$171,550 |
$16,750.00 plus 28% of the amount
over $82,250 |
| $171,550 |
$372,950 |
$41,754.00 plus 33% of the amount
over $171,550 |
| $372,950 |
no limit |
$108,216.00 plus 35% of the amount
over $372,950 |
| Schedule Y-1 Married Filing Jointly or
Qualifying Widow(er) |
| If taxable income is over-- |
But not over-- |
The tax is: |
| $0 |
$16,700 |
10% of the amount over $0 |
| $16,700 |
$67,900 |
$1,670.00 plus 15% of the amount
over $16,700 |
| $67,900 |
$137,050 |
$9,350.00 plus 25% of the
amount over $67,900 |
| $137,050 |
$208,850 |
$26,637.50 plus 28% of the
amount over $137,050 |
| $208,850 |
$372,950 |
$46,741.50 plus 33% of the amount
over $208,850 |
| $372,950 |
no limit |
$100,894.50 plus 35% of the
amount over $372,950 |
| Schedule Y-2 Married Filing Separately |
| If taxable income is over-- |
But not over-- |
The tax is: |
| $0 |
$8,350 |
10% of the amount over $0 |
| $8,350 |
$33,950 |
$835.00 plus 15% of the amount over
$8,350 |
| $33,950 |
$68.525 |
$4,675.00 plus 25% of the
amount over $33,950 |
| $68,525 |
$104,425 |
$13,318.75 plus 28% of the
amount over $68,525 |
| $104,425 |
$186,475 |
$23,370.75 plus 33% of the amount
over $104,425 |
| $186,475 |
no limit |
$50,447.25 plus 35% of the
amount over $186,475 |
| Schedule Z Head of Household |
| If taxable income is over-- |
But not over-- |
The tax is: |
| $0 |
$11,950 |
10% of the amount over $0 |
| $11,950 |
$45,500 |
$1,195.00 plus 15% of the amount
over $11,950 |
| $45,500 |
$117,450 |
$6,227.50 plus 25% of the
amount over $45,500 |
| $117,450 |
$190,200 |
$24,215.00 plus 28% of the
amount over $117,450 |
| $190,200 |
$372,950 |
$44,585.00 plus 33% of the amount
over $190,200 |
| $372,950 |
no limit |
$104,892.50 plus 35% of the
amount over $372,950 |
|
|
|
|
You
must choose your IRS tax return filing status from one of the following options:
Single
Married Filing Jointly
Married Filing Separately
Head of Household
Qualifying Widow(er)
Single
Your filing status is Single if you are unmarried as of
December 31, 2009. However, if you are unmarried and have children, you may be able to file
your tax return as Head of Household. In most instances filing your
tax return as head of household offers tax advantages
because, as you can see from the Tax Rate Schedules above, the tax rates are lower.
Married Filing Jointly
Most married couples choose to file
their tax return as Married Filing Jointly. Your marital
status is determined as of December 31, 2009. When this filing status is chosen, the
taxable incomes of both spouses are combined on a single tax return, and tax is applied to the total
taxable income. Married filing jointly usually offers tax advantages over the
Married Filing Separately option.
Generally, you and your spouse may file a joint
tax return if you are both U.S. citizens or
resident aliens and can satisfy any one of these IRS requirements:
 | you are married and live as husband and wife; |
| you are living together in a
common law marriage recognized by the state in which your
marriage originated; |
| you are married and live apart, but you are not legally separated under a decree of
divorce or separate maintenance; |
| you are separated under an interlocutory decree of divorce, but the decree did not
become final during the tax year. |
Under IRS rules, if you are married you must file
your tax return jointly to do any of the following:
| take an IRA tax deduction for a non-working spouse; |
| claim the tax Credit for the Elderly unless you lived apart for the entire
tax year or can file your tax return as head of household; |
| claim the Dependent Care
Tax Credit or Earned Income Tax Credit unless you live apart and can
file your tax return as head of household. |
When a husband and wife file a joint
tax return each is usually liable for the
entire tax. This is true even if the income shown on the tax return was earned by one spouse.
However, one spouse may be able to avoid tax liability under the Innocent Spouse Rules.
As a widow or widower, you may file a joint
tax return with your deceased spouse for the tax year in which he or she died, provided that you do not remarry within that
tax year. If there
is a remarriage within that time, it may be possible to file your tax return
jointly with your new spouse
if all other requirements are met.
If one spouse is a non-resident alien you can file
your tax return jointly only if you make an election
to be taxed on all your worldwide income and agree to supply all pertinent and necessary
documentation of tax liability.
Married Filing Separately
The Married Filing Separately status is sometimes used by separated
couples, or may be advisable when the spouses have disproportionate levels of
taxable income
and/or tax deductions on their tax return.
Married couples must select married filing separately status
for their tax return when any
of the following conditions apply:
| one spouse files a separate
tax return; |
| a spouse is claimed by someone else as a
dependent on their tax return; |
| each spouse uses a different tax filing
year on their tax return. This happens when one spouse is a calendar
year taxpayer and the other is a fiscal year taxpayer; or |
| one spouse is a non-resident alien, and they do not choose to be taxed
on the
non-resident alien's worldwide income. |
NOTE: If you didn't live with your spouse for the last half of
2009 and you have a
child that lived with you for most of the tax year you may be able to file
your tax return as Head of
Household. The tax rates are lower. See the tests below.
Should we file our tax return(s) separately or jointly?
A married couple may file separate
tax returns, in which case each would report only their
own taxable income and claim only their own tax deductions and tax
exemptions on their tax return. You should compute your tax
liabilities both jointly and separately to determine which method will result in less tax.
Filing your tax returns separately may decrease the phase out of the personal tax exemptions to which you would
otherwise be subject. However, by filing your tax returns separately, the
Elderly and Disabled Tax Credit, the Child
and Dependent Care Tax Credit, and the Earned Income Tax Credit among others, may not be
claimed on your tax returns. All of
these factors should be taken into consideration in deciding whether to file
your tax return(s) jointly or
separately.
Filing your tax returns separately may prove advantageous if, for example, either spouse has high
medical expenses. Because medical expenses are tax deductible to the extent that they exceed
7.5% of adjusted gross income (AGI), one spouse may be able to make better use of
itemized deductions on a separate tax return, where the AGI may be considerably lower than if
a joint tax return is filed. However, if one spouse itemizes tax deductions
on his/her tax return, so must the other.
If you live in a community property state you should also review the Community Property rules.
Head of Household
You may choose to file your tax return as a Head of Household if you are not married (as of
December 31, 2009) and have at least one child or relative who can be claimed as a
dependent on your tax return. You must meet these tests:
| you are not married at the end of the
tax year; |
| you maintained a household for more than one half of
tax year 2009 for your child or for another relative you claim
as a dependent on your tax return; |
| you paid more than one half the costs of the household including property
tax,
mortgage interest, rent, utilities, upkeep, property insurance, domestic help, and food.
These costs do not include clothing, education, medical and transportation expenses,
vacations, or life insurance.; and |
| you are a U.S. citizen or resident alien for the entire
tax year. |
If you are married, you may be permitted to file
your tax return as a head of household if you meet the
following tests:
| you did not live with your spouse for the last six months of
2009; |
| your house was the primary home for your child, adopted child, or step child for more
than one-half of 2009. For foster children the rule is the entire
tax year.; |
| you claim the child as a
dependent on your tax return. If the non-custodial spouse is entitled to claim the
child as a dependent on his/her tax return disregard this rule; |
| you provided over one-half of the cost of maintaining your home including property
tax, mortgage interest, rent, utilities, upkeep, property insurance, domestic help, and
food. These costs do not include clothing, education, medical and transportation expenses,
vacations, or life insurance. |
If you contribute less than 50% of the support for both of your parents you may be
able to qualify as Head of Household if you establish one of you parents as a
dependent on your tax return.
Do this by providing more than 50% of the support for one of your parents and making
notations on the checks accordingly.
Qualifying Widow(er)
Generally, a surviving spouse with dependent children is entitled to file
a tax return
using the married filing jointly tax tables for the two tax years following the
tax year in which
the spouse died.
If your spouse died in 2007
or 2008, and you did not remarry, you may elect to file a
joint tax return with your deceased spouse if you meet these tests:
| you have a child, step-child, adopted child or foster child whom you can claim as a
dependent on your tax return; |
| your child lived in your home for all of
2009 (note that temporary absences for school
or vacation count as time at home); |
| you paid more than one-half of the cost of maintaining the home for the child; |
| you could have filed a joint
tax return with the deceased spouse in the year of death even
if you did not actually do so; |
| you did not remarry before
January 1, 2010. |
If you and your spouse's incomes are about the same the best month to get divorced
is December. That way you can both file your tax returns as "Single". However, if
your incomes are substantially disproportionate, you should get divorced in January. That
way you can file your tax returns jointly and claim a tax exemption for your spouse.
Likewise, if your
incomes are substantially disproportionate, you should get married in December. |
|
 |
Related tax
information about filing status |
|
|
| General Tax Questions |
|
IRS publications about filing status:
For more information about filing status refer to
IRS Publication 501, Exemptions,
Standard Deduction, and Filing Status. Also see
IRS Publication 17, Your Federal
Income Tax. |
|
 |
|
 |
Ask Julian Block your IRS and tax questions! |
|
|
 |
If you can't find the answer to your IRS or tax question in our
web you can call former IRS Special Agent and one of the country's foremost tax attorneys, nationally syndicated columnist ("The Tax
Adviser") Julian Block. Julian is also the tax Editor of Mutual Funds Magazine, America's premier investment magazine. To
call Julian for a tax consultation click
here. |
|
|
|
|
