What filing status is right for you?

Your federal income tax filing status can affect exemptions, reportable income, deductions, credits, tax rates, liability, the type of form you file, and whether you need to file at all. In addition, some states require that you use the status reported on your federal return. That can affect the amount of state tax you pay.
 
Five filing statuses are available under current tax law. Here's an overview to help you determine which one is right for you.

• Single. You're considered single if you're unmarried, divorced, or legally separated as of the last day of your taxable year (generally December 31).

• Married filing jointly. When you're legally married under the laws of your state, you and your spouse can elect to combine your income and file a joint return. In cases of divorce or separate maintenance decrees, the laws of your state determine whether you're considered married. Under proposed regulations issued in 2015, same-sex marriages are recognized for federal income tax purposes when the marriage is recognized by any state.

• Married filing separately. As a married couple, you can choose to file joint or separate returns. When you file separately, you can change your mind later and amend your return to file jointly. However, you can't switch from joint status to married filing separately after the due date of the original return. Joint returns offer benefits such as a higher standard deduction. But separating your tax liability from your spouse's by filing separate returns can be beneficial in some situations. Just be aware that certain breaks, such as the child and dependent care credit, may not be available if you chose this filing status.

• Head of household. This is the filing status to use if you're single and provide more than half the cost of maintaining a household for a dependent who lives with you. You may also be able to use head of household status when you're single and maintaining a separate household for a parent - including one living in a nursing home. Head of household tax brackets are more generous than those for single filers, but less broad than the brackets for married filers who complete a joint return.

• Qualifying widow or widower. If you were widowed during the year and have not remarried, you have the option of filing jointly with your late spouse. When you're widowed and have dependent children, you can continue to use joint tax rates for two additional years following the year your spouse died. This status lets you benefit from the favorable tax rates of joint filers and claim the highest standard deduction.

Contact us for help in determining which filing status fits your situation.

We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720

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