What Are the Five Filing Statuses Permitted on Form 1040, And How Can You Use Each One of These To Better Your Tax Situation?

In this blog post, we’ll answer the question of “what are the five filing statuses permitted on form 1040” and of how you can properly use each one of these at different periods in your life in order to benefit your tax situation. This is actually a really good and a really important thing to know about taxes in the United States, as I’d bet something like only 1% of Financial Advisors can name this off the top of your head, as they typically are not as well-versed in taxation as you would think. The five types of filing statuses you can use on form 1040 are listed below as follows;

  1. Single
  2. Married Filing Jointly, Abbreviated as MFJ
  3. Married Filing Separately, Abbreviated as MFSWhat are the Five Filing Statuses Permitted on Form 1040?
  4. Head of Household
  5. Qualifying Widow With Dependent

And while some of these might sound like hieroglyphs, I can promise you that by the end of reading this blog post, that you’ll understand each and every single one of them enough to have a conversation about them at a cocktail party. I first learned about the five types of filing statuses on your tax return when I started studying for the EA exam, or the Enrolled Agent Exam, which I am still pursuing currently, albeit not very aggressively as my study routine has started to wane as of late. What I can say to anyone reading this before we get started on the meat and potatoes of this blog post, is that if you want to learn tax better than 99% of people not in tax, and better than say 95% of all financial advisors, than you should pick up a PassKey EA review 2020 textbook, it is around 800 pages long, and will definitely serve as a great help for those dealing with insomnia. It has so much information about tax, tax law, and all the different types of tax filing statuses on your tax form, that you can’t help but be extremely proficient in tax by the time you are done with the exams! You’ll even know more tax than most entry level CPA’s by reading this book, I’d highly recommend it if you’re looking to become a master of tax and finances.

The First Filing Status and The Most Commonly Used, A Single Filing

So, I know that I’ve got a lot of sub-headings listed here and that it may seem daunting, but don’t worry I’ll try to keep each one of these to just the gist of what each one is. So Single filing is the simplest and most commonly used filing status in the United States, especially of those under the age of 30. You get the normal standard deduction of 12,400 (as per tax year 2020), as opposed to the $24,800 that you would get if you were married filing jointly, and aside from this, everything else is pretty much the same. You don’t have to have two social security numbers on the tax form, and just need to claim your own W-2’s and your own 1099’s on your tax return, pretty straight forward and to the basics on this one.

Married Filing Jointly, Some Basic Tax Advice for Using This Filing Status

This one starts to get a little bit more complex, especially when we’re starting to deal with divorces, deceases spouses, dependents, and the likes, but what you mainly need to know is that the Married Filing Jointly filing status is the most advantageous, and that every single married couple should opt to file as such whenever humanly possible, as it will result in you getting the best bang for your buck with regards to a tax deduction. That’s because for tax year 2020, the standard deduction for those married filing jointly is $24,800, which means if you made $50,000 and your wife made 0, you can claim federally taxed income of just $25,200 and be in an extremely low tax bracket (and this isn’t even factoring in dependents and other exemptions!) Reasons why you may not want to use this status is if you’re spouse owes the IRS/government a lot of money, as if you file like this they will use your refund for paying down your spouses bill, if you are in need of cash flow, married filing separately may be the way to go in this instance, explained further below.

Married Filing Separately, Why Someone Would Want to Use This Tax Filing Status

Here’s an instance where married filing separately, which only yields a standard deduction for tax year 2020 of just $12,400 a piece, but why would anyone want to do this rather than taking the higher standard deduction against your income? Case and point, say you make $100,000 per year, and you marry someone with a $30,000 tax bill and a lien against their account by the IRS. They currently have $0.00 in their bank account, because the IRS is literally scooping every single dime out of their checking account to pay their overdue tax bill (yes this can actually happen to a point…). Rather than file jointly and lose your entire $6,000 tax refund to your spouse’s debt (assume you have separate finances and a prenuptial agreement so the spouses tax debt is their tax debt and not the couple’s debt). You can get your own cash out by filing separately, rather than having your refund garnished in order to pay your spouses tax bills.

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Head of Household Filing, When You Would Want to Use This Tax Filing Status

You divorced 2 years ago, and have exhausted all of your MFJ filing abilities up to this point. However you have taken full custody of your daughter, while your spouse has since moved states, and no longer interacts with the child. Congratulations! From a tax standpoint, you have just increased your standard deduction by $6,000+ per year and have made it so that you are eligible for the Head of Household filing status, which entitles you to a standard deduction of $18,650 per tax year 2020. In order to qualify as HOH, you must not be married for the current year, have a qualifying dependent living with you, and pay more than half the expenses for the household (qualifying expenses only, things like clothing and education DO NOT count towards the 50% limit) in order to claim this deduction, so in the above situation, you WOULD absolutely qualify.

Qualifying Widow With Dependent, When You Would Use This Unfortunate, Yet Possibly Beneficial Tax Status

This one is a bit more tricky and grim than the others. Basically the way to max out your tax deductions should you ever become a widow or a widower, is to take the MFJ filing status in the tax year that the incident happened (ie. if your spouse passed away on February 2nd of 2020, you can still file Married Filing Jointly, the most favorable filing status in the upcoming tax filing, ie. your April 15th 2021 tax filing.) After this, for two years post mortem, you can use something called the Qualifying Widow with Dependent status, were you to be a widow or widower with a child. This means that through April 15th, 2023, you can use this filing status, which allows a favorable tax deduction of, you guessed it, $24,800, the same amount that they would have been allowed had they still been married, a nice little sympathy reward on the part of the IRS might I add. Anyways, even after this, if one is not remarried that is, you can still claim the Head of Household Filing Status, and once again claim a decent tax benefit and write off of $18,650 per year.

Final Thoughts on The Five Types of Filing Statuses, And When You Should Use Which One

So like I said, you’ll know what I’m talking about by the end of this blog post, that is if you read all the way through without falling asleep 🙂 Leave a comment down below and let us know what you think about the blog post. What is your tax filing status this year? Leave a comment down below with any questions or concerns.





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