Who should file their tax? Wayne Lippman explains. Determine the most advantageous (and allowable) filing status for the taxpayer. Overview of all 5 filing statii: Married Filing Jointly (not legally separated) Qualifying Widow(er) with Dependent Child Head of Household Single Married Filing Separately (Taxpayer either Itemizes or claims 0 standard deductions, if spouse itemized deductions) *Confirm marital status on the last day of the tax year

1. Tax Filing StatusTax Filing Status
Determine the most advantageous (and
allowable) filing status for the taxpayer.
Wayne Lippman
Walnut Creek, CA

2. INTAKE/INTERVIEW Process
• Form 13614-C

3. There are 5 Filing Statuses…There are 5 Filing Statuses…
1. Married Filing Jointly (not legally separated)
2. Qualifying Widow(er) with Dependent Child
3. Head of Household
4. Single
5. Married Filing Separately (Taxpayer either Itemizes or claims 0
standard deductions, if spouse itemized deductions)
*Confirm marital status on the last day of the tax year

4. Marital Status
Will Influence Filing Status!
Generally, taxpayers are considered to be unmarried for the
entire year if, on the last day of the tax year, they were:
•Unmarried
•Legally separated under a separate maintenance decree, or
•Divorced under a final decree on or before December 31st of
the tax year
Taxpayers are considered to be married for the entire year if:
•They were married on the last day of the tax year, or
•The spouse died during the year and the surviving spouse has
not remarried

6. Married Filing Jointly
Both taxpayers must include all income on their joint return
• Determine if married taxpayers wish to file jointly, the
following will apply if on the last day of the tax year;
• They are married and: Live together as husband and wife,
or
• Live apart but are not legally separated or divorced
• They live together in a recognized common law marriage
• They are separated under an interlocutory (not final)
divorce decree
• The taxpayer's spouse died during the year and the
taxpayer has not remarried

7. Common Question!
Does it matter if one spouse does not
have any income?
No. Taxpayers can choose either the Married Filing
Jointly status or the Married Filing Separately status
even if only one spouse has income.

8. Question

9. Answer
• A
– All married taxpayers can choose either status

10. Qualifying Widow(er) with Dependent ChildQualifying Widow(er) with Dependent Child
• Have had a spouse who died in 2009 or 2010. The taxpayer must
not remarry before the end of 2011.
• Have been eligible to file a joint return for the year the spouse
died; it does not matter if a joint return was actually filed
• Have a child, stepchild, or adopted child who qualifies as the
taxpayer's dependent for the year; this does not include a foster
child
• Live with this child in the taxpayer's home all year, except for
temporary absences
• Have paid more than half the cost of keeping up the home for the
year

11. Qualifying Widow(er) with Dependent ChildQualifying Widow(er) with Dependent Child

12. Question

13. Answer
• B
– The taxpayer must have been eligible to file a joint
return; it does not matter if a joint return was
actually filed.

14. Head of HouseholdHead of Household
• Unmarried or "considered unmarried" on the last day of the
tax year, and
• Paid more than half the cost of keeping up a home for the tax
year, and
• Had a qualifying person living in their home with them more
than half the year (except for temporary absences)
– A qualifying child
– A married child who can be claimed as a dependent
– A dependent parent
– A qualifying relative who lived with the taxpayer more than half
the year and is one of the relatives listed in the Volunteer Resource Guide (Tab
C), Interview Tips, Table 2: Dependency Exemption for Qualifying Relative, Step 2
– Pub 4012
25

15. Married and Living Apart with Dependent Child…Married and Living Apart with Dependent Child…
• Permitted to file as Head of Household and receive the benefit of lower tax
amounts if they:
• File a return, separate from their spouse, for the tax year.
• Paid more than half the cost of keeping up their home for the year. See the
Cost of Keeping Up a Home worksheet in Publication 17, Filing Status.
• Lived apart from their spouse during the entire last six months of the tax
year. The spouse is considered to have lived in the home even if
temporarily absent due to special circumstances, such as military service or
education.
• Provided the main home for more than half the year of a dependent child,
stepchild, or foster child placed by an authorized agency. This test is met if
the taxpayer cannot claim the exemption only because the noncustodial
parent can claim the child using the rules described in Publication 17,
Personal Exemptions and Dependents, Children of divorced or separated

16. Question

17. Answer
• No
– Michael cannot file Head of Household because
he does not have a qualifying person. Justin does
not meet the definition of a qualifying child or
qualifying relative.

18. Question

19. Answer
• NO
– Even though Todd provided over half the cost of
providing a home for Jane and Amanda, he cannot
file Head of Household because Amanda did not
live with him over half the year. Jane cannot be
Head of Household either because she did not
provide more than one-half the cost of keeping up
the home for her daughter. See the Volunteer
Resource Guide (Tab B), Filing Status for Head of
Household.

20. Question

21. Answer
• False
– Abner is the noncustodial parent and cannot claim
Head of Household filing status. If Abner has
another qualifying relative for HOH purposes, then
he may claim HOH based on the other person.

22. Question

23. Answer
• Yes
– Carlos can file as Head of Household because his
parents are qualifying persons for this filing status.

24. Question

25. Answer
• NO
– Jeffrey cannot file as Head of Household because
neither Janice nor John are qualifying persons for
Jeffrey.

26. Single
• A taxpayer is considered single if, on the last day of the
tax year, the taxpayer was:
• Not married
• Legally separated or divorced, or
• Widowed before the first day of the tax year and not
remarried during the year
• Although a taxpayer is considered single, the taxpayer
may qualify for another filing status that gives a lower
tax, such as Head of Household or Qualifying
Widow(er) with Dependent Child.

27. Question

28. Answer
• Yes
– Even though Maxine did not live with her, Maxine
is Nancy's qualifying person for Head of
Household filing status because Nancy can claim
her mother as a dependent under the rules for
qualifying relative.

29. Married Filing Separately
•The Married Filing Separately (MFS) status is
for married taxpayers and either:
•Choose to file separate returns, which means
the husband and wife report their own income
and deductions, or
•Cannot agree to file a joint return

30. Married Filing Separately
• If a taxpayer uses the Married Filing Separately filing status
and the spouse itemizes deductions, the taxpayer must:
• Also itemize deductions, or
• Claim zero as the standard deduction
Special rules apply to Married Filing Separately taxpayers,
which generally result in the taxpayer paying a higher tax;
• The tax rate is generally higher than on a joint return
• Taxpayers cannot take credits for child and dependent care
expenses, earned income, and certain adoption and
education expenses
• Some credits and deductions are reduced at income levels
that are half those for a joint return such as the child tax
credit and the retirement savings contribution credit

31. Question

32. Answer
• C
– A taxpayer whose spouse itemizes deductions or
losses must either itemize deductions or claim "0"
as the standard deduction

33. Question

34. Answer
• C
– The Qualifying Widow(er) with Dependent Child
filing status yields as low a tax amount as Married
Filing Jointly

35. About Wayne Lippman
https://www.facebook.com/lippman.
associates.CPAs
https://www.facebook.com/lippman.
associates.CPAs
https://www.youtube.com/waynelipp
man
https://www.youtube.com/waynelipp
man
http://lippmancpas.com
https://twitter.com/waynelippmanhttps://twitter.com/waynelippman
Wayne Lippman has forty years of
experience in public accounting
including twenty years with Price
Waterhouse, where he served as a tax
partner in the San Francisco and
Oakland offices. He was previously
Managing Tax Partner of the Walnut
Creek office of Price Waterhouse. http://Waynelippman.wordpress.c
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