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The Correlation Between Your Filing Status & Federal Tax Deduction.

The Correlation Between Your Filing Status & Federal Tax Deduction.

On filing for a tax deduction, you have to consider your filing status. Your position in your household determines your status. Your status determines the tax bracket you are categorized into and the credits and deductions available to individuals within the same category.

Your tax status throws more light on what your taxes will be like.

The various status categories under which you can file for federal tax deductions include: 

  • Single.

  • Married but filed as separate entities.

  • Married and filed as one entity.

  • Head of Household.

  • Qualified widow or widower with a dependent offspring.

The statuses listed above determine what your tax deductions will be, what credits you can qualify for, as well as what your tax rates will be like. They can affect whether or not you can file for a tax return, as well.


What is your tax filing status?

Your household's structure determines both how you will be taxed and what your tax deductions will be. This is why different status categories have been provided to better tax individuals according to their household state. To be taxed appropriately and get the right tax returns for your household type, it is imperative to identify a filing status that best describes your household situation.

A more detailed explanation of these categories are as follows:

  1. Single - You’re unmarried or separated.

  2. Household head- You're unmarried but footing most of the bills for your household, especially when you’re caring for a loved one who is a qualifying person.

  3. Married and filing as a single entity- You are married with a living partner during the tax year (or are still married).

  4. Married but filing as separate entities- You’re married, but you both want to file as a single entity.

  5. Qualifying widow or widower- You lost your spouse within the previous two taxable years, and you have a dependent offspring who was with you for the year, and you haven't gotten a new spouse within that same tax year.

Not giving careful attention to your filing status can lead to an overpayment or underpayment of taxes.


What Federal Tax Deduction Covers.

Federal tax deductions are stipulated amounts deducted from the gross earnings of an individual, group of individuals or a company before the net profits are taxed.

The idea behind standard or federal tax deductions is to provide people with some part of their income that is not being taxed. These deductions can be made two ways;

  1. By deducting the fixed fee according to your status.

  2. By deducting the sum of all your deductible expenses. 

The fixed fees are subject to increase year after year as a result of inflation.

However, you can only choose one way to have your federal tax deductions. You cannot opt for both ways within a year. If you go for the fixed fee in the current year, you can choose to go for the summation of your deductible expenses the following year.


How much are the federal tax deductions?

The amount deducted from your earnings is dependent on the status with which you filed for your taxes. To better illustrate, for this year, 2021, the federal tax deduction for anyone filing for tax returns as a single person or as a married individual who is filing as a separate entity is $12,550. Married couples filing as a single entity get twice this amount, while household heads get $18,800.


Special Occurrences

In some cases, married couples filing as separate entities have one spouse filing for tax returns by summing up the list of deductible expenses. The second spouse must follow this route and cannot file for the standard tax deduction when this happens. On the other hand, if the couple files for tax returns as a single entity, but one of the spouses was absent during most of the taxable year, the standard tax deductions will be unavailable for them also. Filing a return that does not span a year or change in the accounting period also takes away the option of standard tax deduction. 


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Pat Raskob
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