Filing Status? What is that?
Q. My payroll person told me that the filing status on the W-4 doesn’t necessarily mean the same thing as my marital status. Is that true? What is filing status?
A. Filing status on the W-4 and filing status on your tax return are not necessarily the same thing. The W-4 drives withholding only. The withholding formulas issued by the IRS come in only two flavors, married and single. Any other situation is handled by the number of allowances claimed. Other situations include head of household, children and multiple jobs. In certain situations, if married folks claim married on their W-4s, they will not have enough withholding. By switching over to the single withholding formula, additional withholding takes place. Some companies use the W-4 to determine the marital status of their employees. This is not a good policy. In fact, if an employer receives a lock-in letter for a specific employee, he/she may be directed to withhold at Single with zero allowances regardless of the marital status of the employee.
On your tax return, the rules are different. You are only allowed to claim married if you are in fact married. If you are married, you cannot claim single. There is a special status called married filing separately for those who wish to use it. Certain situations may warrant this for better tax treatment. The key here is that your marital status on the last day of the tax year determines your status for the tax return for that year.
I hope this helps.
