Filing Status: Which Tax Status Will Save You The Most Money?

One of the first things you have to do when filling out your tax return is choose a filing status. While your relationship status primarily determines which status you’re eligible to claim, taxpayers also have some room to choose in certain situations.

Your filing status has bigger implications than checking a box may suggest, including the amount of your standard deduction, the tax credits you can claim, what tax bracket you fall into and ultimately the amount of your tax bill or refund. Your marital status on the last day of the year will guide your selection, though you may elect to change your status for other reasons, as well.

Here’s a quick overview of each filing status:

Here’s more on how each filing status works and rules you need to follow.

Single

Who this tax status is for: Taxpayers who are unmarried, divorced or legally separated. If you have dependents or are recently widowed, you likely qualify for another filing status that could be more valuable from a tax perspective.

How it works: If you’re single — or as the IRS puts it, “considered unmarried” — and don’t have a dependent, then generally this is the tax status for you.

Once you’re married, you can no longer file as single. From a strictly tax perspective, however, some people are better off staying single, says Yishai Kabaker, a certified public accountant and partner at Gursey Schneider, an accounting and advisory firm headquartered in Los Angeles.

For example, if you’re a high-earning couple, you may pay lower taxes by filing as single taxpayers because the income thresholds that determine the federal tax brackets could bump you into a higher tax bracket sooner if you file jointly. This situation is known as the marriage penalty.

“There are kind of rare scenarios where the marriage penalty is so severe that it doesn’t warrant getting married for that purpose,” Kabaker says. “But marriage confers a lot of benefits beyond the tax code, so I don’t recommend building your life around tax planning.”

Rules to follow: For the IRS, your marital status is based on the last day of the year, which means when you got hitched during the year doesn’t matter. Once you’re legally married, you can no longer file as a single taxpayer. On the flip side, if you end the year legally separated or divorced or widowed, you may once again claim the single status. Or you may qualify for another filing status that’s more beneficial, such as head of household or qualifying surviving spouse, depending on your family situation.

Head of household

Who this tax status is for: Taxpayers who are unmarried and pay more than half the cost of living expenses for themselves and at least one qualifying dependent. There are some less common situations in which a married taxpayer is eligible to file as head of household if your spouse didn’t live with you during the last 6 months of the year, and you paid more than half the cost of keeping up a home that’s the primary residence of your dependent(s).

How it works: While the colloquial definition of head of household might confuse taxpayers, the IRS has strict rules about who qualifies for this filing status — and it’s typically reserved for unmarried people with qualifying dependents who live with you. You must be either unmarried or considered unmarried on the last day of the year to file as head of household.

Filing as head of household is popular for taxpayers following a divorce, provided that you have at least one qualifying dependent and based on the terms of your custody agreement. To claim head of household, a child must live with you for more than half the year. It’s also possible to file as head of household for other qualifying dependents, including parents, in which case they’re not required to live with you.

Rules to follow: The requirements to file as head of household are a bit onerous but can be worthwhile as this status is more advantageous than filing as single because you’ll qualify for bigger tax deductions and more favorable tax brackets, Kabaker says. “People oftentimes want to get this status if they can,” he says.

If you’re divorced, both you and your ex-spouse may be able to file as head of household at different times provided that you share custody and you don’t claim the same dependent in the same year, Kabaker says. Couples may reach agreements during their divorce proceedings about which ex-spouse gets to claim which child or children each year, he adds.

Married filing jointly

Who this tax status is for: Taxpayers who are married, or whose spouse died during the year.

How it works: By opting for the married filing jointly status, you will combine all of your and your spouse’s income and allowable expenses — and file only one tax return. This is true whether or not both of you had income or deductions during the year.

The married filing jointly status is, by far, the most popular choice among married couples, accounting for more than 93 percent of the returns filed by married couples in 2022, according to IRS data. That’s because your tax obligations are often lower than the combined tax from the other filing statuses, plus you benefit from a standard deduction that’s twice that of single filers.

This filing status provides simplicity for married couples because you’re only required to file one return, and it’s also generally the best option, Kabaker says.

“It usually produces the most optimal tax result, though not always,” he says.

The IRS recommends that married taxpayers experiment with figuring their tax obligations as both married filing jointly and married filing separately to determine which status provides the lower combined tax obligation.

You also can claim the married filing jointly status if your spouse died during the tax year, and if your spouse died during the current year before you filed your return.

Rules to follow: By filing a joint return, both you and your spouse are held responsible, jointly and individually, for what you report — including the tax due and any interest or penalty you may incur. Even though you’re filing one return, both spouses must generally sign the return and that means shared liability for what you’ve reported.

If your spouse makes an error or doesn’t pay the tax due, that burden will fall on you. That’s why it’s a good idea if you’re not fully comfortable or aware of your spouse’s taxable income to instead opt for the married filing separately status, Kabaker says.

Married filing separately

Who this tax status is for: Taxpayers who are married and don’t want to file a joint return or find that filing separately lowers their tax obligation.

How it works: For a variety of reasons, married couples may opt to file taxes separately. When it comes time to file your taxes, you’ll submit a separate return from your spouse that generally includes only your income, tax credits and deductions. You will still need to include your spouse’s name and Social Security number on your return and you will need to agree on whether you are both claiming the standard deduction or itemizing your deductions.

While this filing status is not particularly popular among married couples, the most common scenario when people decide to change from married filing jointly to married filing separately is in preparation for a divorce, Kabaker says. “Once taxpayers decide they no longer want to be married and they want to start cutting ties, this is often the first step to that process.”

Rules to follow: This filing status typically produces a worse outcome for taxpayers in the form of a higher tax bill. That’s because several rules apply to this filing status that limit whether you can claim certain deductions or credits.

For parents, in particular, there are a few downsides: You can’t claim the credit for child and dependent care expenses in most cases and you will have to meet certain requirements to take the earned income tax credit.

Finally, if you switch back and forth between married filing jointly and married filing separately, you will face an administrative burden of combining your tax obligations, then dividing them, and combining them again, Kabaker says. That’s why most people only switch to the married filing separately status leading up to a divorce or if there’s a tangible tax benefit.

Qualifying surviving spouse

Who this tax status is for: Taxpayers whose spouse died within the past two years and who have a dependent child.

How it works: As covered above, you can use married filing jointly as your filing status for the tax year when your spouse died. But the year your spouse died is the last year that you can file using that status, after which you may be eligible to use the qualifying surviving spouse status for the following two tax years.

This filing status is unique in that you are entitled to the joint return tax rates and the highest standard deduction amount even though you’re no longer filing a joint return.

Rules to follow: Because this status allows taxpayers to file as though they are still married, there are understandably some strict requirements that must be met. This filing status is intentionally temporary, you must have a qualifying child who lives with you and you must pay more than half the cost of keeping up your home.

How to decide which tax filing status is best for you

It may seem as though there are multiple tax filing statuses to choose from, but most people will be deciding between two options, at most. That’s because the tax filing status that’s best for you is largely dictated by your marital status and family situation.

While you’ll likely change your tax filing status over the course of your lifetime, switching from one to another year-to-year can entail a lot of work, depending on the complexity of your tax situation, Kabaker cautions. For some people, doing so is worth the effort, he says, while for most people, it’s better to stick with the same filing status until you qualify for another.

If you still have questions about which status to use, the IRS has a free “what is my filing status” tool to guide you through the decision process.