It’s no secret that single filers seemingly get the short end of the stick when it comes to taxes, more so than their married-filing-jointly counterparts – the IRS definitely taxes married couples more favorably than other filing statuses. Generally, those who are married and filing jointly fare better as far as taxation is concerned, but every tax situation is unique. And, what works for someone else may not work for you. If you're unclear on the number of withholding allowances you should claim, consult with a qualified tax professional, or check out the IRS' Withholding Calculator for more guidance.
What Are Withholding Allowances?
Your withholdings define how much federal income taxes your employer should withhold from your paycheck every pay period. Taxpayers can take an allowance for themselves, their spouse and any qualifying dependents. These allowances are reported on the IRS Form W-4 that you complete at the start of a new job. You can change the number of allowances claimed at any time by simply submitting a new form with your employer if your life situation changes. Because the U.S. tax system is a pay-as-you-earn system, you are required to pay taxes on income as it is earned. Self-employed taxpayers take care of their tax obligation by paying estimated taxes each quarter; however, employees have their taxes deducted from each paycheck.
If you are a single filer with no children, you can claim one withholding allowance for yourself and one for each job you have. When you work two jobs, you can claim your allowances all on one job’s W-4 or split your allowances between your jobs. The IRS recommends that taxpayers in this situation claim the most allowances on the job that pays the highest wages. If you are unsure of the number of allowances you can or should claim, the IRS has an interactive withholding calculator that helps you determine how many allowances to claim on your W-4.
Minimum Filing Requirements and Tax Rates for Single Vs. Married
The real difference between single versus married filing status is most evident in how both statuses are taxed, and when each status is required to file. Single filers are required to file at a much lower income threshold than married-filing-jointly couples. Every year, the IRS releases new minimum filing requirements that are adjusted for inflation to determine whether or not someone needs to file taxes. These thresholds depend on your age, filing and dependency status as well as amount of income earned. In this regard, married-filing-jointly couples – especially when one spouse doesn’t earn income – have the tax advantage.
Here are the 2017 thresholds your income must exceed before you are required to file taxes:
- Under 65 years of age – $10,400
- 65 years of age and older – $11,950
Married Filing Jointly
- Both spouses under 65 years of age – $20,800
- One spouse 65 years of age and older – $22,050
- Both spouses 65 years of age and older – $23,300
As you can see, single taxpayers are required to file taxes at much lower income amounts than those who are married and filing jointly. The IRS also taxes wage earners at differing rates depending on income and filing status. Also known as tax brackets, the marginal tax rate is comprised of seven tiers as of the 2017 tax year, and ranges from 10 percent to 39.6 percent. For example, single filers earning up to $9,325 are taxed at the 10 percent tax rate, while married-filing-jointly taxpayers can earn up to $18,650 and remain in the 10 percent bracket. The highest 2017 bracket of 39.6 percent is applicable when a single filer earns $418,001 or more, and when married filing jointly couples earn $470,701 or more for the year.
- IRS: Publication 505 (2017), Tax Withholding and Estimated Tax
- Investopedia: What is the Difference Between a Single and a Married Withholding Tax?
- IRS: IRS Withholding Calculator
- IRS: Tax Withholding
- SmartAsset: How Many Allowances Should You Claim?
- PriorTax: How to Determine Your W-4 Allowances
- Efile: 2017 Income Tax Return Filing Requirements, Reasons to File
- Tax Foundation: 2017 Tax Brackets
- IRS: Form W-4
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