Tax Terms You Need to Know - Filing Status

Video Transcript

Hey, this is Chris with Money Burst. Since we are right in the middle of tax season, I thought I would continue our series on tax terms to hopefully help you feel a little more comfortable this tax season. Today, I want to talk to you about something called 'filing status.'

Now if this sounds confusing, and you're like, 'I don't know what this is,' don't be surprised. I don't think many people do because I don't think you just inherently know what this means. But essentially, filing status is this little box that you check on your tax return that lets the IRS know, I guess, like, the status of your household.

So, are you single, meaning you're filing by yourself? Are you married? And under married there are two types of married filing. So, there's married filing separately - that's where a married couple files two separate tax returns apart from each other. Or, married filing jointly - that's where two individuals in this marriage file one tax return together. Or, you can select head of household. And this is where a single individual also has a dependent that they're supporting, typically, a child, and that would give them other additional benefits over just filing as a single individual. And when I say additional benefits, what I mean is that, depending on your filing status, there are different tax brackets that your income is applied to.

So, whether you're single, each of those different married filing types, or head of household, you can end up with different tax brackets that apply to your income. You can also end up with a different amount for your standard deduction that you're eligible to claim that will reduce your income.

So, depending on the filing status you choose, it can have a significant impact on the actual amount that you pay in taxes. So, you always want to make sure you talk to your accountant and find the correct filing status to match your actual situation. Make sure you get the biggest refund, and legal refund, possible.