Posts Tagged ‘Marriage’

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Determining Your Correct Filing Status

In Accounting & Finances,Business,Culture,Taxes on April 27, 2013 by Sufen Wang Tagged: , , , , , , ,

MH900151049Single, Married, or Head of Household?

Okay, seriously, now that the tax deadline, April 15, had passed, and tax extension had filed; you really need to start working on your returns!

What’s your status? No, not your Facebook status, your income tax return filing status. Filing status can impact the tax benefits you receive, the amount of your standard deduction, and the amount of taxes you pay. It can even – drum roll please – affect whether you have to file a federal income tax return.

MH900019119Classifying your relationship as “It’s Complicated” will only annoy the overworked IRS Agent. You must choose from five filing statuses on a federal tax return, with the three most common being “Single,” “Married Filing Jointly,” and “Head of Household.”

MH900237191Your marital status on the last day of the year is your marital status for the entire year. So even if you had a New Year’s Eve wedding, in tax return terms, you were married for all of 2012. A married couple can either file together using the Married Filing Jointly status, or separately, in which case each person’s filing status would be Married Filing Separately. Pretty self-explanatory.

If your spouse died during 2012, you usually can still file a joint return for that year. Qualifying Widow(er) with Dependent Child status applies only ifyour spouse died during 2010 or 2011, you have a dependent child, and you meet certain other conditions.

MH900237195If you aren’t married, divorced, or legally separated, in general your filing status will be Single. However, you might be able to file as Head of Household, which has a higher standard deduction and lower tax rates than the Single filing status. To claim Head of Household, you can’t be married and you must have paid more than half the cost of maintaining a home for yourself and a qualifying person. Head of Household is the status most often claimed in error, so make sure you meet all of the requirements.

You can and should shop around for the best income tax deal. If more than one filing status fits you, choose the one that allows you to pay the lowest taxes. IRS e-file will help you determine the correct filing status, and you can also use the Interactive Tax Assistant at IRS.gov.

Sufen Wang, M.S. Accountancy

Wang Solutions, Long Beach, CA (562) 856-0793

Editor: Hannah Huff, M.F.A. Creative Writing: Poetry, (626) 806-5805

Articles

Standard Deduction vs. Itemized:

In Accounting & Finances,Business,Taxes on April 11, 2012 by Sufen Wang Tagged: , , , , , , ,

Find Your Perfect Match

To itemize or not to itemize? That is the question with personal tax returns due April 17. When choosing between a standard or itemized deduction, you’ll want to pick the method that gives you the lower taxes.
 
To do this, first figure out the amount of your standard deduction. It’s based on your filing status and can change each year from inflation adjustments. For 2011, the amounts are:

Single: $5,800
Married Filing Jointly:   $11,600
Head of Household:   $8,500
Married Filing Separately:  $5,800
Qualifying Widow(er):  $11,600
 
These numbers are higher for taxpayers who are blind and/or 65 or older. If the total amount you spent on qualifying expenses is more than your standard deduction, you can usually benefit by itemizing.  
 
However, not everybody gets to choose between itemized and standard deduction. Are you a nonresident alien, dual-status alien, or an individual who files returns for periods of less than 12 months due to a change in accounting periods? If you answered yes to any of the above, you are not eligible for the standard deduction.
 

Those in the “Married Filing Separately” category have some extra rules when it comes to deductions. If one spouse itemizes deductions, the other spouse must also itemize to claim their allowable deductions. Better dust off those communication skills and make sure you and your spouse are on the same page, that is “standard or itemized?”  Hit that “refresh” button and make sure both of your tax returns are in sync….

Now that you’ve decided on standard or itemize, the next item on your list should be to finish your taxes…
 
On the Money,
Sufen Wang
Wang Solutions