Filing Single

Single

WHO USES IT:

Unmarried people who don’t qualify for another filing status.

HOW IT WORKS:

There are rules about being unmarried. If you’re legally divorced by the last day of the year, the IRS considers you unmarried for the whole year. If your marriage is annulled, the IRS also considers you unmarried even if you filed jointly in previous years.

Don’t be sneaky. The IRS can make you use the “married filing jointly” or “married filing separately” status if you get a divorce just so you can file single and then remarry your ex in the next tax year. Translation: Don’t get divorced every New Year’s Eve for tax purposes and then get married again the next day — the IRS is onto that trick.

WHAT IT GETS YOU:

Possibly lower taxes if you make a lot of money. That’s because at the very highest tax brackets, the income levels that determine the tax brackets for married people filing jointly are less than double the income levels that determine the tax brackets for single people. It’s a phenomenon called “the marriage penalty,” and it means married couples end up in higher tax brackets faster than single people do.

For example, let’s assume you and your partner are single in 2018 and you each have $325,000 of taxable income. You each file single. You’ll each be in the 35% tax bracket. Now let’s assume you and your partner are married and file jointly. You still each make $325,000. You might expect to remain in the 35% bracket, but that’s not the case anymore. If you’re married and filing jointly, your income — simply because it’s combined — puts you squarely in the 37% bracket. Let’s hope your spouse was worth it.