The filing status is used by the tax return to decide how much standard deduction is given. Choose the wrong one and you either pay too much tax or get a nasty surprise from the IRS.
During my first year, several women, mad at their husbands, wanted to file their own tax returns. One insisted on filing “married filing single”. To her disappointment I told her there was no such thing; she was either married filing joint or separately. One husband forbade me from entering his information on his wife’s married filing separate return. Since that information is required., I did not do either of their tax returns.
Married filing separately. Usually this it not the best choice. You lose many tax credits and benefits. Also, if one spouse itemizes, the other cannot take the standard deduction; either both itemize or both take the standard deduction (the deductions can be split) However, there are times when it is better to file separately. A search on-line will provide several good articles. When you do your own tax return, be sure the software program has a box to check if your spouse itemizes. If not, you should use another program.
Married filing joint. If your spouse passes away and you do not remarry in the same tax year, you can file married filing joint for that tax year. Tax return programs will ask if spouse is deceased, and generally asks for year of death. For years after year of death you can file single, head of household, or qualifying widow, depending on qualifying factors, and many programs will offer the correct choice automatically.
Head of Household and Qualifying Widow. If you have a qualifying dependent, the tax return software may offer this choice to you. Be aware, however, that some programs will allow you to choose one of these without entering dependent information, and will generate a tax return with the wrong higher standard deduction. Although they may give the warning message about the IRS rejecting your return if you file, they may allow you to electronically submit anyway. The more reputable programs will stop you cold before you even get close to final copy.
Problem tax software. The programs on the IRS website (2008 tax year versions) that generate erroneous returns include TaxSlayer, EfileTaxReturn, and Tax$imple (requires ActiveX download and is difficult to use or quit in the middle), and possibly others. These programs will show a warning message, but will still generate an erroneous printable return.
Consider your filing status carefully. If you’re not sure, look at Publication 17 on the IRS website, or use a search engine to get a plain language explanation. The right filing status is the first step in a good return.