Tax Filing Status:
Definition:
* Single: You intend on filing as a single person and taking the default deduction given by the IRS. Currently $5,000 (Subject to change).
* Married Filing Jointly to Same Spouse: You and your former spouse are planning on filing together for the current tax year and claiming the "Married" Deduction. Currently $10,000 (Subject to change).
* Married Filing Jointly to New Spouse: You and your new spouse are planning on filing together for the current tax year and claiming the "Married" Deduction. Currently $10,000 (Subject to change). Difference discussed below.
* Head of Household/ Married Living Apart: You have your child at least 50.01% of the time. Make sure and always check with your spouse to avoid sending conflicting information to IRS.
Effect:
* Single: Lowers amount of funds available to pay support relative to Married Filing Jointly to new spouse. For example: Dad makes $60k taxable income per year. Dad is able to deduct $5,000 from this amount by filing single therefore he only has $55,000 to which he must pay taxes for.
* Married Filing Jointly Same Spouse: Increases the amount of money for which the Higher Earner has available to pay support due to the tax benefits of filing with your former spouse over filing single.
* Married Filing Jointly New Spouse: Increases the amount of money for which the Higher Earner has available to pay support because the he/she will claim two exemption as opposed to the one if he was filing with his former spouse. However, please read Effects: New Spouses income below.
* Head of Household/MLA: Again, please make sure you have custody of your child 50.01% of the time to qualify for this exemption. (Check with a local tax consultant for further clarification). Filing Head of Household provides the Higher Earner with a greater tax savings and more money available to pay support. For the Lower Earner filing Head of Household, will have the opposite effect. That is, all else equal, they will have less of a need for support (lowers support)