FILING STATUS
PUB 4012 TAB B
PUB 17 CHAPTER 2
NTTC TRAINING 2008 1
OBJECTIVES
List 5 Filing Status Choices
Define and Compare each
Select the Correct Filing Status
To Yield the Lowest Legal Tax
Become comfortable using Pub 4012
NTTC TRAINING 2008 2
5 CHOICES FOR FILING STATUS
PUB 4012 TAB B
SINGLE
MARRIED FILING JOINTLY (MFJ)
MARRIED FILING SEPARATE (MFS)
HEAD OF HOUSEHOLD (HH)
QUALIFIED WIDOW(ER) (QW)
NTTC TRAINING 2008 3
1040 draft 09/01/2008
View of 1040 page 1 showing Filing Status.
NTTC TRAINING 2008 4
4012
TAB
B
NTTC TRAINING 2008 5
4012
TAB
B
NTTC TRAINING 2008 6
4012
TIP
NTTC TRAINING 2008 7
EFFECT OF FILING STATUS ON
STANDARD DEDUCTION
Single: $5,450
Married Joint: $10,900
Married Separate: $5,450
Head of Household: $8,000
Qualifying Widow(er): $10,900
NTTC TRAINING 2008 8
EFFECT OF FILING STATUS ON
TAX BRACKET
15% tax rate applies when taxable
income is over 10% rate (2007)
Single: $7,825
Married Joint: $15,650
Married Separate: $7,825
Head of Household: $11,200
Qualifying Widow(er): $15,650
NTTC TRAINING 2008 9
LIVING SITUATION ANALYSIS
DETERMINED BY INTERVIEW
Marital status as of 12/31
Others living in the home?
Their relationship/dependency
Who paid upkeep
If widow(er)
Date of death of spouse
Any dependents
NTTC TRAINING 2008 10
SINGLE
Not married as of December 31
No related dependents
NTTC TRAINING 2008 11
EXERCISE: Single Status
James Smith and Mary Jones married
December 16, 2008 and wish to file
separate returns as single individuals.
NTTC TRAINING 2008 12
MARRIED FILING JOINT
Married on last day of year
Common law marriage
Recognized in state where started
Spouse died during year/not
remarried
Most advantageous filing status
NTTC TRAINING 2008 13
MARRIED FILING SEPARATE
Taxpayer chooses to file MFS
Spouse has already filed MFS
Married but separated,
No children in home
NTTC TRAINING 2008 14
Exercise: Married Filing Joint
William Jones and Mary Smith have
been married for 6 years, have no
dependents, and lived apart since
March of 2008.
NTTC TRAINING 2008 15
MFS DISADVANTAGES
Highest tax rate/lower standard
deduction
Cannot claim most tax credits
Cannot deduct student loan interest
Capital loss limit $1,500 (not $3,000)
NTTC TRAINING 2008 16
HEAD OF HOUSEHOLD -
UNMARRIED
Provided home for qualified child
May not be a dependent due to divorce
Provided home for related dependent
>50% cost of maintaining home for
dependent parents living elsewhere
NTTC TRAINING 2008 17
HEAD OF HOUSEHOLD -
MARRIED
Lived apart last 6 months of year
Provided home for:
your child, stepchild, or eligible foster child
for over 6 months
No other relatives qualify
NTTC TRAINING 2008 18
HEAD OF HOUSEHOLD
Key advantage
Higher standard deduction
Advantageous tax rate structure
NTTC TRAINING 2008 19
Exercise: Head of Household
John Smith and Mary Jones have
been married 12 years. In April 2008
John moved out of the house and has
filed for divorce. Mary has
maintained the household and
supported their two children ages 5
and 9.
NTTC TRAINING 2008 20
QUALIFYING WIDOW(ER)
Spouse died in one of two past years
Has dependent child or stepchild
Maintained home for child
Can file QW for 2 yrs only
NTTC TRAINING 2008 21
QUALIFYING WIDOW(ER)
Advantages
Highest Standard Deduction
Use MFJ Tax Rates
NTTC TRAINING 2008 22
Exercise: Qualifying Widow(er)
with Dependent Child
Homer Williams has maintained the
household and raised his 3 dependent
children since his wife died in 2006.
What is the proper filing status for
2006, 2007, 2008, and 2009?
NTTC TRAINING 2008 23
5 CHOICES FOR FILING STATUS
PUB 4012 TAB B
SINGLE
MARRIED FILING JOINTLY (MFJ)
MARRIED FILING SEPARATE (MFS)
HEAD OF HOUSEHOLD (HH)
QUALIFIED WIDOW (QW)
NTTC TRAINING 2008 24
FILING STATUS
QUESTIONS?
COMMENTS?
NTTC TRAINING 2008 25