One of the first decisions you make when completing your tax return, your filing status, can affect your refund's size, especially if you're married. While most married couples file jointly -- 96 percent did in 2009 -- a joint return is not always the most beneficial way to boost your refund. Married-filing-separately status requires more effort, but the time you invest offers tax savings under the right circumstances. Calculating your taxes both ways will point you in the higher refund direction. (When you use TurboTax, we’ll do this calculation for you and recommend the best filing status.)
The IRS uses a percentage of adjusted gross income -- AGI -- to determine whether some deductions can be used such as medical and certain miscellaneous expenses. Filing separately gives each spouse a lower AGI. If one of them has a lot of medical expenses, such as COBRA payments resulting from a job loss, computing taxes individually allows that spouse to reach the needed AGI percentage based on his or her own income.
Or, a spouse who spends a lot of time on the road and in the air might have travel expenses such as baggage fees that merit separate filing. Expenses can add up for an unemployed spouse looking for work -- long distance calls, resume preparation, career counseling and networking -- and could be a sleeping miscellaneous deduction that reduces taxable income. However, choosing to file separate returns has drawbacks, such as losing credits available to joint filers, that you must weigh to maximize your refund potential.
Tax reductions from claiming dependents can cut a single parent's tax bill when he or she files as head of household. You need to have one or more children who lived with you for more than six months, and paid more than 50 percent of the cost of keeping a home. Those costs include mortgage and rent, utilities, homeowner's or renter's insurance, repairs and food.
Single taxpayers who care for a parent may also qualify for the more advantageous head-of-household status if they paid more than half of the cost of maintaining that parent's residence for the whole year. Your parent need not live with you; when you pay more than half of their cost to live in a home for seniors or rest home, you can claim head of household.