Updated for tax year 2023.
When you file your taxes, your tax filing status can make a big difference in how much tax you owe. Many people simply choose the filing status they believe best fits their situation. But in some cases, you may have more than one option. So, how do you decide which tax filing status will give you the most tax advantages?
Read on for an overview of each tax filing status and learn how to pick the right one for your tax situation, including important information on how to file taxes.
What are your tax filing options?
As of 2023, there are five tax filing statuses to choose from:
- Single
- Head of household
- Married filing jointly
- Married filing separately
- Qualified widow or widower
We talk about each tax filing status in more detail below.
Single
2023 standard deduction for single filers: $13,850
Most people have probably filed as single at some point in their lives. Simply put, the single filing status is for those who are unmarried and don’t meet the qualifications of any of the other filing status.
Head of household
2023 standard deduction for head-of-household filers: $20,800
The head of household filing status is typically for unmarried people who financially support other people, but the name of this tax filing status can be confusing. Filing as head of household instead of single can be more advantageous because it offers a bigger standard deduction.
Often, people think that if you are married and are the only income earner in your household, you qualify as head of household, but that is incorrect. To be eligible for that status, you must be unmarried and provide the majority of financial support for at least one other person for the better part of the year.
You must fit the IRS definition of being unmarried. If you are not legally married, the IRS considers you unmarried. You are also considered “unmarried” if:
- You haven’t lived with your spouse for the last six months of the tax year
- You paid more than half the cost of your home during the year
- Your home is the primary residence for your child
- You plan to file a separate return from your spouse
To be considered head of household, the IRS also looks at your qualifying person — otherwise known as your dependent(s). A child is the most obvious dependent, but to qualify as a dependent, the child must live with you for over half a year and be under 19 years old. The child can also be under the age of 24 if they are a student.
Your parents can also count as qualifying dependents. To claim head of household status in this instance, you must prove that you pay for over half of your parents’ financial needs (even if they don’t live with you).
Married filing jointly
2023 standard deduction for joint married filers: $27,700
The married filing jointly filing status is relatively straightforward. To use this filing status, you must be legally married and report your combined income with your spouse. As a married couple, you only have to file one income tax return. You also claim all of your combined tax deductions and tax credits on the same tax return.
One advantage of filing jointly includes only having to complete one tax return. It’s also likely that you will end up with a smaller tax liability than if you filed separately. On the other hand, if your spouse isn’t responsible for their finances, you are held liable for paying the IRS. If you’re unsure if married filing jointly is right for you, check out I’m Married, What Filing Status Should I Choose?.
Married filing separately
2023 standard deduction for separate married filers: $13,850
Since filing jointly with your spouse usually brings less tax liability, what are the advantages of filing separately? Often the most significant reason married couples choose to file separately is that one of the spouses has a large amount of out-of-pocket medical expenses. Since the IRS only allows you to deduct the amount that exceeds 7.5% of your adjusted gross income, it can be next to impossible to claim the majority of those costs if you and your spouse have a high combined income.
Married couples may also choose to file separately if one of the spouses does not trust how their partner handled their finances during the year. Filing separately can be a way to avoid being on the hook to pay the other spouse’s tax liability. Also, if a couple is divorcing, they may choose to keep their tax returns separate. Although, if their divorce is not finalized by Dec. 31, they can still file a joint return if they choose.
It’s important to note that being married but filing separately is not the same as filing single. Each status has an entirely different tax bracket. Married couples who file separately typically pay more in taxes than married couples who file jointly. That is because separate filers cannot claim several of the tax deductions and credits available to those who file jointly.
Qualified widow or widower
2023 standard deduction for qualified widow(er) filers: $27,700
It may seem pretty obvious who would qualify for this filing status, but the IRS has particular notes about what constitutes a qualified widow or widower. This tax filing status is for those who not only have lost a spouse but are also providing financial support for a child who lives at home.
The qualifying widow or widower status is unique in that you are only eligible for it for a set period. Although your personal situation might not change, the IRS only allows you to file as a widow or widower for a couple of years.
For instance, if your spouse passed away last year, you could file your taxes as married filing jointly for that tax year. In the two years following, you qualify to file as a widow or widower as long as you have a dependent living at home. This status exists for newly widowed individuals who are easing back into becoming single. By electing the widower filing status, you can still file as if you were married, which likely will keep your taxes lower than if you filed single.
I got divorced during the tax year. Which filing status should I choose?
If you went through a divorce, the IRS counts you as being unmarried for the entire year, even if your divorce wasn’t finalized until December. In this case, you should file your taxes as single for the year in which you got the divorce, unless you’re eligible for the head of household filing status or you remarry by the end of the year.
TaxAct makes tax filing easy
Once you pick your filing status, you can use intelligent tax software to actually file your tax return. Tax prep software like TaxAct® can help you figure out which tax filing status is best for you and can aid you in filing your return, making tax season as simple and painless as possible.
