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When filing a United States income tax return, a taxpayer must choose a filing status. This decision plays a dominant role in calculating that person's taxable income and determining his tax liability. A person's filing status depends largely upon whether he is married and is based on his status on the last day of tax year. Filing statuses for federal income tax include single, married filing separately, married filing jointly, widow with qualifying dependent children, and head of household. Divorced taxpayers usually file as single.
Married couples can choose from multiple married filing statuses to find the most attractive and least tax-liable filing option. Using the "married filing jointly" and "married filing separately" filing status options, married couples can decide whether it benefits them most to file their income tax together or separately. The separate filing option is sometimes used by married couples who have separated but remain married.
Status is a big part of income tax calculation, but other factors can play a part in determining tax liability. Along with income and a taxpayer's number of dependents, the filing status helps determine the taxpayer's tax bracket, which dictates the taxes he will pay. Although the filing status is based on a taxpayer's status on the last day of the tax year, if the taxpayer is widowed during the year, the surviving spouse can usually still elect to file as married for that year.
Careful determination of the correct tax filing status is important in ensuring that owed taxes are calculated correctly. Misrepresenting a filing status to lower tax rates can result in late tax payments, tax penalties and fees, and accidentally choosing the wrong status can mean unnecessarily elevated taxes. Each taxpayer can have only one filing status. When more than one of the filing statuses is applicable to the taxpayer, he should choose the filing option with lower tax liability.
Income tax is a yearly payment that the government charges its citizens. In the United States, income tax is collected at both the federal and state level, except in states with no income tax. Taxpayers are required to withhold their owed taxes from the income they make during the year, but most employers automatically withhold taxes for employees. Excess taxes paid are given back to the taxpayer when he files yearly tax returns.