As the new tax season approaches, it is good to know what your filing status will be and if you even need to file taxes. How do you determine if you need to file a tax return? I’ll answer that question for your in today’s article. I’ll also breakdown moments when you’re not required to file a tax return.
What are Tax Exemptions?
Tax exemption is a monetary amount given to help reduce your taxable income. Usually, you can deduct a specific amount for each exemption claimed for that particular tax year.
There are 2 types of exemptions you can deduct:
- Personal exemptions for you and your spouse
- Exemptions for dependents known as dependency exemptions
What Filing Status Should I Use?
It is very important to select the correct filing status when filing your individual tax return. Many tax credits, deductions, and the amount of taxes paid are dependent upon the filing status selected. At times, more than one filing status may apply to you. In this case you should work with your tax advisor to figure out which status is best for you.
The 5 Filing Statuses:
- Married Filing Jointly
- Married Filing Separately
- Head of Household
- Qualifying Widow(er) with dependent child