In some cases, your status can even be the deciding factor in whether you have to file at all. So picking the right one when you file is crucial.
This applies to never-married, unmarried and divorced taxpayers. You are considered single for the whole year if you were legally single on the last day of the year.
2. Married filing jointly
In this case, as with the single status, you are considered married for the whole tax year as long as you were married on the last day of the tax year. In 2013, the Supreme Court of the United States invalidated the section of the federal Defense of Marriage Act that defined, for federal purposes, marriage as a legal union between a man and woman. Now same-sex marriages are recognized for federal purposes, including tax filing, even if their home state does not accept such marriages as legal.
When you file jointly, both spouses report all their income on one Form 1040. Both filers may be held responsible for any tax (or subsequent penalty and interest) due. This is the case even if only one spouse earned all the income. On the plus side, the married filing jointly option does offer some tax credits that are not available under other filing statuses.
3. Married filing separately
Here couples segregate their income, deductions and exemptions and file two individual returns. This might be advisable in cases where, for example, one spouse had large medical expenses. Because these costs must exceed a percentage of the filer's income before they are deductible, using only the eligible spouse's earnings by filing separately might make that deduction threshold more attainable.
In most cases, however, couples find they will generally pay more combined tax on separate returns than they would on a joint return. In some cases, at least one spouse's tax rate ends up higher than it would have been under a joint filing. Also, when husbands and wives file separate returns, they lose some tax credits and deductions they could have taken if they'd filed jointly.