Tax 101 Tip: Why Your Filing Status Matters
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Are you ready for taxes?!
Alright, I admit, taxes aren't the most exciting thing to do on the weekend, but knocking them out quickly means that one huge to do item off our list.
We started getting notifications from some of our financial institutions that some tax documents are ready.
I opened a folder to collect them for when I sit down to get our taxes done.
When I first started, I was really intimidated by them. The forms, jargon, and seemingly nonsenical calculations frustarted me.
Now, though, I'm better prepared and more confident about the process.
A big part of that was educating myself about common tax mistakes to avoid and understanding the basics of taxable income.
One mistake people make is their filing status, specifically if you recently married.
Why Your Filing Status is Important
Having the right filing status can have a huge impact on your taxes.
When you fill out your 1040 (U.S. Individual Tax Return), you must choose one filing status of out of the 5 the IRS recognizes. They are:
- Married Filing Separately
- Married Filing Jointly
- Qualifying Widow(er) with Dependent Child
- Head of Household
Your tax rate and standard deduction are determined by your filing status.
Your status on December 31 has a bearing for your filing status.
For example, if you are married on December 31, you can file as married for your tax returns.
Each has its own requirements, so double check to make sure you qualify. In some cases, you may qualify for two different statuses.
If that's your circumstances, look for the status with a lower tax rate.
If your status is married filing jointly or qualifying widow(er) with dependent child, you generally have the lowest tax rate.
When you file your taxes, you must have a social security number for yourself, your spouse, and any dependents you claim.
When are Taxes Due?
Taxes are due April 15th of each year unless it falls on the weekend, in which case it's due the next business day.
For your 2018 taxes, April 15th falls on a Monday. If you file late (and don't file an extension) you can get penalties and fees.
If you need to file an extension, check out the IRS resource for Form 4868 Application For Automatic Extension of Time To File U.S. Individual Tax Return.
IRS Publications to Check Out
Looking for More Tax Tips?
If you're looking for more information on taxes, I also contribute over at TurboTax's blog. Here are a few topics I've covered:
Besides my posts, TurboTax also has plenty of articles and resources to help you maximize your tax return.
This article was originally published
This post may contain affiliate links. Please read my full disclosure for more info.
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