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Filing Status

Filing Status. Married, Single, and More. References. Pub 4012, Tab B Pub 4491, pg 25 Pub 17, Chapter 2 Resource Tool for Tax Counselors laminated tri-fold. Five Choices for Filing Status. Pub 4012 Tab B. Single Married filing jointly (MFJ) Married filing separately (MFS)

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Filing Status

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  1. Filing Status Married, Single, and More Oregon Tri-Counties Training 2013

  2. References • Pub 4012, Tab B • Pub 4491, pg 25 • Pub 17, Chapter 2 • Resource Tool for Tax Counselors laminated tri-fold Oregon Tri-Counties Training 2013

  3. Five Choices for Filing Status Pub 4012 Tab B • Single • Married filing jointly (MFJ) • Married filing separately (MFS) • Head of household (HH) • Qualified widow(er) (QW) Oregon Tri-Counties Training 2013

  4. Intake and Interview Sheet Check Part II entries on Intake Form Oregon Tri-Counties Training 2013

  5. TaxWise – Main Information Sheet Enter name and SSN only if child not also dependent Oregon Tri-Counties Training 2013

  6. Form 1040 Oregon Tri-Counties Training 2013

  7. Filing Status Importance • Many tax items affected by filing status • Necessity to file a return • Standard deduction • Eligibility for certain deductions or credits • Tax rate brackets Oregon Tri-Counties Training 2013

  8. Filing Status – Need to File a Return? Oregon Tri-Counties Training 2013

  9. Filing Status – Standard Deduction Oregon Tri-Counties Training 2013

  10. Filing Status – Tax Rate Oregon Tri-Counties Training 2013

  11. Filing Status Pub 17 Ch 2 • Two criteria: • Marital status on last day of tax year • Federal definition – “married” • Legal marriage under laws of any state or country • Includes same sex spouses • Does not include civil unions or registered domestic partners • Type of dependents, if any Oregon Tri-Counties Training 2013

  12. Living Situation Analysis • Marital status as of 12/31 • Others living in home, if any • Their relationship/dependency • Who paid upkeep • If widow(er) • Date of death of spouse • Any dependents Oregon Tri-Counties Training 2013

  13. Single • Not married as of December 31st • Married, but legally separated • No related dependents Oregon Tri-Counties Training 2013

  14. Married Filing Jointly • Married on last day of year • Includes common law marriage • Includes same-sex married couples • Spouse died during current year/not remarried • Generally most advantageous filing status Oregon Tri-Counties Training 2013

  15. Married Filing Separately • Taxpayer chooses to file MFS • Spouse has already filed MFS • Married but separated • In rare cases – more advantageous • Generally, no children in home Oregon Tri-Counties Training 2013

  16. MFS Disadvantages • Highest tax rate/lower standard deduction • Cannot claim most tax credits • Cannot deduct student loan interest, tuition and fees adjustment, education credits • Capital loss limit $1,500 (not $3,000)‏ • Most of Social Security benefits can become taxable Oregon Tri-Counties Training 2013

  17. Head of Household – Unmarried • Provided home for qualified child • Need not be dependent if divorced • Provided home for related dependent • Provided more than half the cost of maintaining home for dependent parents living elsewhere Oregon Tri-Counties Training 2013

  18. Head of Household – Married • Lived apart all of last six months of year • Provided home for your child, stepchild, or eligible foster child for over six months • No other relatives qualify. • Only one Head of Household in a household Oregon Tri-Counties Training 2013

  19. Head of Household • Key advantages • Higher standard deduction than Single or MFS • Advantageous tax rate structure Oregon Tri-Counties Training 2013

  20. Qualifying Widow(er) • Spouse died in one of two past years • Has dependent child or stepchild • Grandchild not eligible • Maintained home for child • >50% of cost • Can file QW for two years only Oregon Tri-Counties Training 2013

  21. Qualifying Widow(er) • Advantages • Standard Deduction – same as MFJ • Use MFJ Tax Rates Oregon Tri-Counties Training 2013

  22. Problem #1 • Mr Buck provides total support for his two children. His wife died in 2010, and he has not remarried. • What is the best filing status for Mr Buck? Head of Household • What would have been best in TY2012? Qualifying Widower Oregon Tri-Counties Training 2013

  23. Problem #2 • Ralph and Betty’s divorce became final during 2013. Betty has full custody of their two children and will claim them as her dependents. Ralph pays $500 per month child support. • What is Ralph’s Filing Status? Single • What is Betty’s Filing Status? Head of Household Oregon Tri-Counties Training 2013

  24. Problem #3 • Luke and Linda are still married, but chose to live apart for most of the year • Their two children lived with Linda all year • In July, Luke was out of a job so he moved back in the house for just that month • What filing status can they each choose? MFJ or MFS (both must use same status) Oregon Tri-Counties Training 2013

  25. Problem #4 • Dick and Jane are married, lived apart all year and are filing separate returns • Their 23-year-old daughter Jody lived with Jane all year while attending school full-time • Jody earned $2,500 during the summer • What is Jane’s best filing status? Head of Household Oregon Tri-Counties Training 2013

  26. Filing Status Questions? Comments? Oregon Tri-Counties Training 2013

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