Filing status makes a difference in tax bill
4. Head of household: This status applies to unmarried taxpayers who during the tax year provided more than half the cost of keeping up a home for the filer and a qualifying person who lived in the home for more than six months. Tax rates for qualified filers usually are more favorable than those in the single or married filing separately categories. Head of household filers also get a larger standard deduction amount than do single filers. In some cases, married persons who have not lived with their spouses may qualify for this status.
5. Qualifying widow or widower with a dependent child: You can still file a joint return for the tax year in which your spouse passed away. After that, you might be eligible to file as a qualifying widow or widower.
This filing option is available for two years following the year of a spouse's death and basically applies the filing data afforded married joint filers. The key here is that the surviving spouse cared for a dependent child who lived with the adult for the full tax year. During that time, the taxpayer must have paid for more than half the cost of keeping up the home.
Picking the right filing status isn't always easy; some individuals find they actually qualify to file as more than one type of taxpayer. This could be the case for a divorced mother. Although technically she could file as a single taxpayer, it would be a smarter tax move to file as a head of household because she is taking care of dependent children. Head of household would give her a tax rate lower than the single filer's rate, plus she'd get a bigger standard deduction.
So take the time to examine your personal situation and how it fits into the various filing status choices. The IRS Publication 501 provides more details on each status's requirements, as well as specific exceptions, examples and work sheets to help you make the appropriate filing choice.
And always keep in mind that the IRS lets you file under the applicable status that offers you the best tax advantage. The tax savings you might get by selecting the correct status could make any extra trouble worthwhile.