How many federal filing statuses can you name? One? Two?
While there are technically only two withholding formulas a taxpayer can select when filling out his or her W4, there are certain variations to consider when working on allowances that will affect your paycheck. It’s important to know all the differences, because this has a huge effect on your tax return for the year. Below is a look at the different selections. You should note your status come December 31 is your status for the entire upcoming year.
Filing Statuses (Withholding Formulas):
All Statuses (W-4, 1040, Tax Returns, Etc): 1 . Single – Choose this selection if you aren’t married, or are divorced or legally separated.2 . Married, Filing Jointly – Married couples who choose to file a joint tax return should pick this status. This also applies to anyone whose spouse died in 2015 and still wants to file a joint return.3. Married, Filing Separately – Married couples can also pick to file their own returns. For some people, filing separately is a good idea if it results in less taxes owed.4 . Head of Household – This status applies for people who aren’t married, but adhere to special rules. If you’ve paid for more than half the cost of your household (with a qualifying dependent), consider this status. Be sure to double check all the stipulations before selecting, however.5. Qualifying Widow(er) with Dependent Child- If your spouse died in the last few years and you have at least one dependent child, consider this status.
These free resources should not be taken as tax or legal advice. Content provided is intended as general information. Tax regulations and laws change and the impact of laws can vary. Consult a tax advisor, CPA or lawyer for guidance on your specific situation.