eFinancial Portals

What is my filing status? How many exemptions can I claim? Can I get an extension if I need one?  There are so many questions surrounding taxes that it is always best to consult a qualified tax professional or the IRS directly. Tax laws change frequently; therefore, what was applicable last year may not be this year. The IRS provides the most current information and instructions on preparing your taxes. Even if you use a software application to complete your taxes it's still a good idea to contact the IRS directly or a tax professional that you trust.

Circular 230 Disclosure: Pursuant to recently enacted U.S. Treasury Department Regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (1) avoiding tax-related penalties under the Internal Revenue Code, or (2) promoting, marketing or recommending to another party any tax-related matters addressed herein.

Tax Basics

In general, if you have earned income or have received income from other sources then you are required to pay taxes. Depending on where you live or work, many people have to pay federal, state, and even city or county income taxes. While federal tax remains the same no matter where you live, other local taxes can vary.

What Is My Filing Status

Your filing status is the first of several factors used to determine the amount you owe in taxes. When trying to determine their filing status, most people think of single or married. However, there is more to it than that. In fact, there are up to five categories under which you can file. These categories include: single, married, filing jointly, married filing separate, head of household or qualifying widow with dependent child. Based upon your unique situation and/or the recommendations of your tax professional, you should select the category that works best for you.

Here is a general summary of each:

• Single: typically includes anyone unmarried, widowed, divorced or legally separated as of the last day of the year;
• Married filing jointly: typically includes married couples, common law marriages and anyone whose spouse died during the tax year;
• Married filing separately: typically includes legally married couples, whether or not they live together;
• Qualifying widow or widower with a dependent child: typically includes a widowed person in the two years following the year in which their spouse died, and if a qualifying dependent lives in their household;
• Head of household: typically includes an unmarried adult who maintains a home and supports a qualifying relative.

You must file based upon the status that most accurately describes your current status. However, in some cases you may fall into more than one category. In these situations it is even more important to consult your tax preparer. They will most likely recommend you go with the category that results in the lowest taxes. For example, a married person may find it more advantages to file married filing separately than married filing jointly.

What Is My Filing Status

Your tax bracket, also known as your income range, is the second factor used to determine how much you owe in taxes. Everyone falls into one of six brackets. Each bracket has a different tax rate. In 2010, the lowest tax rate was 10 percent, while 35 percent was the highest. For example, if a married person filing jointly earned $45,000 in 2010, their tax rate would be 15 percent.

The chart below gives you the income ranges for each tax bracket and each filing status for 2010. (The brackets change slightly each year to account for inflation.)

* 2010 Federal Tax Rate Schedules