Your marital status on the last day of the year determines your status for the entire year.
Your filing status determines the assumptions that DeductionPro makes to calculate your estimated tax savings. A general overview of filing status selections available in DeductionPro follows:
Your filing status is Single if you are not married at year-end and don’t qualify as a widow(er) with dependent child or head of household.
Choose Head of Household if you will be single as of December 31, 2007, or considered unmarried for 2007 (as explained below), and meet both of the following requirements:
You will pay more than half the expenses for your household during 2007.
You have a qualifying child (see Who qualifies as a dependent?) who will live with you for more than half of 2007, or you are claiming a parent as a dependent for whom you paid more than half of the household expenses.
If you are claiming a dependent under a multiple support agreement, that dependent does not qualify.
Even if you were legally married at the end of 2007, you are considered unmarried if you and your spouse lived apart for the last six months of 2007, your home was the main home of your child for half the year, and you were able to claim the child as your dependent (or would have been able to, but for an agreement to allow the non-custodial parent to claim the child as a dependent).
If you are married on the last day of the year, you must either file as Married Filing Jointly or Married Filing Separately. This remains true even if you are separated from your spouse and pursuing a divorce. Unless the divorce is final by the end of the year, the IRS considers you married, and you can’t file a return as a single taxpayer. The large majority of married taxpayers will be better served filing a joint return rather than filing separately. In rare circumstances, it might make sense to file separate returns if you and your spouse make a similar income and you find that by splitting income on separate returns you can claim deductions that might otherwise elude you.
You can claim Qualifying Widow(er) status if you meet the following tests:
You were entitled to file a joint return with your spouse for the year your spouse died.
You did not remarry before the end of the year.
You have a child, stepchild, or an adopted child for whom you can claim an exemption.
You paid more than half the cost of keeping up a home that is the main home for you and a dependent child for the entire year except for temporary absences.
Note that the death of a spouse can affect your filing status. For more information on this topic or other filing status questions, refer to IRS Publication 501.