Choosing the Right Filing Status

Choosing the Right 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.

Your marital status on December 31 is your status for the whole year. 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:

1. Single. This status normally applies if you aren't married. It aksi applies if you are divorced or legally separated under state law.

2. Married Filing Jointly. If you're married, you and your spouse can file a joint tax return. If your spouse died in 2016, you can often file a joint return for that year.

3. 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.

4. 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.

5. Qualifying Widow(er) with Dependent Child. This status may apply to you if your spouse died during 2014 or 2015 and you have a dependent child. Other conditions also apply.

Unsure of which choice is best for you?  Contact Watson CPA

www.rwatsoncpa.com

Newsletter Information

Here we are already in March and you can definitely see signs of spring all around us. Spring break is in the near future and snow gear (mostly not used this year!) gets packed away to make room for rain boots, umbrellas, and sports equipment. In our home, we’re working on adding softball tournaments, football conditioning, work schedules, and summer school deadlines to the family on line calendar. Once nature starts turning green we know and anticipate the change in our schedules and it’s a welcome change even when the winter has been mild and almost snowless!

In our newsletter this month, you’ll read about information we’ve touched on before but worth reviewing again prior to completing your tax return this year. We review current scams again as this information is vital to avoid becoming a victim. We can never talk about this topic too much! Also included in the newsletter is information on what income is taxable and overlooked tax breaks. It never hurts to review overlooked tax breaks to see if you qualify for any this year!

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