Deciding whether you should declare yourself single on your annual tax return may seem like a simple choice. After all, you’re either single or you’re not, right? Well, as with many things involving the Internal Revenue Service, determining whether you should file as single isn’t straightforward.
Here’s what you need to know about filing a tax return as a single person, including whether you’re eligible to do so, if filing single is your best option and how to boost your tax savings.
1. Figure out your legal filing status
If you’ve ever been married — even if you’re legally divorced — how the IRS views your marital status has everything to do with when you were married. For tax purposes, if you were married on the last day of the tax year in question, you probably have to file as married. In that case, you have two choices: married filing jointly or married filing separately.
If you weren’t legally married on the last day of the tax year in question, you don’t have to file as married for the year, even if your divorce became official as late as Dec. 30. Still, you may not want to file as single. There are other statuses that could be more beneficial.
Learn more about divorce and taxes.
2. Unmarried doesn’t necessarily mean single
For example, if you have a dependent child or care for a qualifying person, you may qualify as head of household. In some cases, you can do this even if you’re still legally married. If your spouse is dead, you could potentially file as a qualifying widow(er). Both of these statuses can be more financially advantageous than filing single, so it’s worth reviewing your options with a tax professional.
3. Get your withholdings right
Once you know your best filing status, it's time to look at ways to reduce your tax burden for the upcoming year and make the most of your income. Start with your withholdings. If you got a big refund last year, or if you’re expecting one this year, you’re probably putting too much of your pay toward taxes. It’s often more advantageous to pocket that money throughout the year instead of giving it to the government. Review your withholdings, and consider filing a new W-4 form with your employer that will let you keep more of your pay each month.
4. Know your tax rate
Before you change your W-4, it’s a good idea to check your tax bracket. The new tax laws have changed many people’s tax bracket, so check the IRS’s new tax tables to see where you fall.
5. Don’t overlook deductions
Did you move this year? Buy a new laptop for work? Spend money hunting for a new job? There are a lot of expenses that can be deducted, so don’t leave money on the table by not exploring what may be available.
6. Make IRA contributions early
The earlier you contribute to your individual retirement account, the sooner your tax-deferred earnings begin. Don’t wait until the end of the year if you have the money earlier. (Though you can deduct IRA contributions through April 17.)
7. Know when to file
Tax Day is always April 15, right? Nope. It varies when April 15 falls on a weekend like it does this year. You have until Tuesday, April 17 to file your 2017 taxes.
8. Know when to ask for help
Just because you’re single doesn’t mean your taxes are easy, even if you’re eligible to use the 1040EZ form. Everyone has different talents and skills. If doing your taxes isn’t among yours, save yourself the headache (and potentially money) and get some help. Use tax software or hire a professional to ensure you take advantage of every tax-saving opportunity available.
9. Plan for a status change
If marriage is in your near future, know that getting married can have an impact on your taxes. There’s still a marriage penalty for a lot of couples. Check out how filing as a couple will impact your taxes before setting a date. While it’s less-than-romantic, doing a little tax planning and potentially postponing your marriage until the following tax year could save you both a lot of money.