Amid the first questions is your filing status, when you are ready to plop down and start preparing that tax return.
Do you know an answer to a following question. Specifically, what’s your filing status, this is the case right? Regardless, amidst the simpler questions is really the first one on your 1040 form. Tax forms from the IRS can be incredibly confusing to people who are not versed in the tax code. Here is an explanation of your choices. In truth, they are confusing to experts as well.
Filing status refers to how you are positioning yourself in the tax code. Single -If you chose this designation, you are telling the IRS you are neither married nor claiming dependents apart from yourself. You may also claim this status if you are not responsible for any kids, So if you are divorced. This is the case. Those are not your only two filing status choices. That said, we will take a closer look at your options. Married couples or people running small businesses, in turn, can claim more things as deductions as well as claiming more tax credits. Single people tend to get fewer deductions being that there simply are fewer concerns about you making the bill.
Married Filing Jointly -As the name suggests, so this category is for married couples.
It created the filing separately designation, married Filing Separately -The government wants to promote families. The basic idea was to avoid situations where getting married hurt people from a tax perspective. Considering the above said. At least there’s an option if filing jointly hurts you, the goal hasn’t always been met.
Head of Household -Often confused with the single filer designation, therefore this status is a reflection of modern times. Widower with Dependent -The least used filing status, it’s for people who have lost their spouse but still have a child dependent. This status is often known as the divorced filing status. It is for an unmarried person who is responsible for maintaining a home for themselves and another who qualifies, just like a child.
In the evening, lots of people fall nicely into one designation or another.
Now for the other 80 or so. Normally, well, there you have it on the filing status. You have to take the time to sit down and find out whether filing separately or jointly is in your best interest, Therefore if you are married. You should fill out the first line of your 1040 return. Of course, it can save you loads of money on your taxes, it sounds like a time waster.
Richard Chapo is with BusinessTaxRecovery. Richard Chapo is with BusinessTaxRecovery.