I know, this book is supposed to be about kids. But when it comes to taxes, the single most important thing you need to figure out is your filing status. Your filing status is the foundation for figuring out almost all of the credits and deductions to which you are entitled, as well as your income tax rate.

For federal income tax purposes, there are five filing statuses:

  • Single;
  • Married Filing Jointly;
  • Married Filing Separately;
  • Head of Household; and
  • Qualifying Widow(er) With Dependent Child.


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I know, this book is supposed to be about kids. But when it comes to taxes, the single most important thing you need to figure out is your filing status. Your filing status is the foundation for figuring out almost all of the credits and deductions to which you are entitled, as well as your income tax rate.

For federal income tax purposes, there are five filing statuses:

  • Single;
  • Married Filing Jointly;
  • Married Filing Separately;
  • Head of Household; and
  • Qualifying Widow(er) With Dependent Child.

Once you have determined your filing status, you'll need to figure your number of personal exemptions. The number of exemptions is important because each exemption reduces your taxable income: for 2012, you can reduce your taxable income by $3,800 for each exemption you claim.

You are generally allowed one exemption for yourself unless you can be claimed a dependent by another taxpayer. If another taxpayer can claim you as a dependent, you cannot take an exemption for yourself even if the other taxpayer does not actually claim you as a dependent.

If you are married, you may be allowed one exemption for your spouse. For tax purposes, your spouse is never considered your dependent (this is great cocktail party chatter and possibly a great retort during an argument).

You can also generally claim an exemption for each of your dependents. A dependent is defined as your qualifying child or qualifying relative; a dependent does not have to be your own child to qualify.

Got the basics? Good. Now let's look at the details, including some tricky situations.

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