The first and crucial step before filing tax return is to determine your filing status. One gets standard deductions according to their filing status. It also qualifies or disqualifies you from certain deductions and credits.

IRS has determined five filing statuses for any US citizen:

1. Single: The person who is not married or who has legally annulled one’s marriage and is still not married on the last day of the year. The available standard deduction is the least and changes every year or every two years.

2. Married filing jointly: If a couple is legally married on the last day of the year they can file a joint return. This status is not mandatory for all married couples. Couples who wish to file separate returns can do that. Couples who are living separately or living apart in different states can choose not to file as MFJ. The standard deduction available is double that of Single status.

3. Married filing Single: If a couple is legally married and wishes to file separate return, then they can choose the MFS filing status. Couples who have not been legally separated till the last day of the year or couples who live apart can choose this option. The standard deduction available is same as that of Single status. Couples cannot enjoy more deduction that is available to couples filing MFJ.

4. Head of Household: An unmarried person who has paid for more than half of the expenses of the house in that particular year, lived for more than six months in that house with a dependent can file tax return with HOH as filing status. If the legal separation is in process and you are not living with your spouse for more than six months, even then you can file as HOH. The available standard deduction is little less than 1.5 times that of Single status.

5. Qualifying Widower: If your spouse has died in the two preceding years and you have not yet married till the last day of the year and you have provided for half of the expenses of the house and of a dependent living then you can choose this filing status. The available standard deduction is twice of that of Single status.

The two most important identification numbers with regards to taxation are:

1. SSN: Social Security Number is given to every citizen by the US government. It is a nine digit number which is our identification used by various departments for all legal purposes. If you are a legal US citizen, you are liable to file a tax return and hence you need a valid SSN. It is reflected on all the income statements and is the principal identification. This is considered even more important than your name as names can be same for two or more individuals.

2. EIN: Employer Identification Number is the number given to all companies and businesses to be used as their unique identification factor. For a taxpayer it is important to know the EIN of the employer if any, then the broking firms from whom the taxpayer has received dividend or interest income and companies from which the taxpayer has received any legal form of income like trusts and partnerships. EIN is also important for charitable organizations so that their donors can get adequate deductions on their taxes.

Now we know how important it is to determine your tax filing statuses to get maximum possible deductions. Also important, is to know your SSN and EIN of your related business and organizations so that the tax assessment becomes easier.