If you are a U.S citizen, permanent resident or non-U.S citizen who earns income connected with any activities in the U.S, generally you are subject to U.S Individual Tax. The U.S. adopted a progressive tax rate as most other advanced countries do. The tax rates range from 15% to 39.6%, which is considered very high compared to other countries. The progressive tax rate table significantly varies with their filing status. Every taxpayer falls into one of the 5 filing statuses below under IRC §1. 

1) Married Filing Jointly (MFJ) or 2) Qualifying widow(er) (i.e., Surviving Spouse)

Individuals with MFJ or Qualifying widow(er) filing status benefit from the most favorable tax rate. 

There is no particular condition under which individuals may file their tax return with 1) MFJ status as long as they are married at the end of the taxable year. 

However, to qualify for the status of 2) Qualifying Widow(er), there are two conditions to be met. 

1) The eligible years for Qualifying Widow(er) are only 2 years following the death of spouse. An surviving spouse is still allowed to file MFJ for the year when his or her spouse dies. For following 2 years, the individual may file in Qualifying Widow(er) status, which is as favorable as the MFJ tax table. 

2) The surviving spouse must have at least one dependent who lives in the same household, and provide more than 50% of the costs maintaining the household for entire year.  

* What is included in the costs of maintaining household?

Included 

Not included

Rent, Mortgage, Interest, Taxes, Insurance on home, repairs, and food 


Cost of clothing, education, medical expenses, vacations, life insurance, transportation. rental value of home, value of taxpayer's services


What is indicated by Qualifying Widow status is that a surviving spouse maintains the tax benefit equivalent to MFJ for 2 years only if  he or she keeps at least one dependent in household, paying the most expenses(50% or more) of maintaining household. 

3) Head of households

        

Simply put, Head of Households status is generally a status next to Qualifying Widow status. After the 2 years of Qualifying widow status, if a surviving spouse still keeps the dependent in the his or her household and support the dependent, he or she is entitled to a somewhat less, but still favorable tax table. The followings are the detailed conditions for qualifying for Head of household. 

1) An individual other than a qualifying widow must be not married.

2) The individual must live with at least one dependent in the same household and provide at least 50% of costs of maintaining the household for more than half a year. (exception: the individual's parents do not need to be living together as long as the individual support 50% of the parents' household (i.e., nursing home)

4) Married filing Separately

        

This is the least favorable tax table for an individual taxpayer. Thus, most married taxpayers do not choose this status. However, if each married individual generates huge income streams, under a few circumstances, MFS produces more favorable tax result after taking deductions and tax credits into consideration.  

 5) Single

         

If an individual is not married and does not have any dependent living together, he or she must file with Single status. 

The picture below is a brief cycle of an individual's tax filing status. 

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