Tuesday, January 11, 2011

Got married in 2010, here's how to file your taxes

Filing status determines your standard deduction and tax rate. It depends on your marital status.

The IRS defines marriage as a legal union between a man and a woman as husband and wife. You are considered married for the whole year if you are married on the last day of the tax year.

State law governs whether you are married or legally separated under a divorce or separate maintenance decree. If you are divorced by the last day of the year, you are considered unmarried for the whole year.

If your spouse died during the year, you are considered married for the whole year.

Married couples can either file jointly (MFJ) or separately (MFS). You should figure your tax liability both ways and choose the filing status that has the lowest tax. Filing together or separately on the Form 1040 means you need to use the same filing status on the Ohio return (does not matter on a local tax return). Many tax benefits on the Form 1040 are not available for MFS.

You can change your filing status between MFJ and MFS from year to year. On Form 1040X, you can also amend your tax return and change your filing status from MFS to MFJ within three years of the original due date of the returns. If you file MFJ, once the original due date of the return passes, you can not amend and change to MFS.

If you changed your name, you'll want to take the necessary steps to ensure the name on the tax return matches the name registered with the Social Security Administration. Filing a return with an incorrect name can cause your tax return to be rejected by the IRS and may even delay your refund. Informing the SSA of a name change is easy; you’ll just need to file a Form SS-5, Application for a Social Security Card at your local SSA office and provide a recently issued document as proof of your legal name change.

Tomorrow's post will detail how a married couple living apart can be considered unmarried for tax purposes.

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