Pretending You Are Still Single
Determining your marital status is usually as easy as looking down at your ring finger. But what if you are in the middle of a complicated divorce, are divorced and have recently started taking care of the kids more often, or were widowed in the past year? Can you choose a tax status based on whichever one means you will owe the least?
Likely consequence: If you intentionally choose an inaccurate filing status to boost your tax benefits, you're likely to find yourself selected for auditing. An audit can result in a higher tax bill, as well as interest and penalties. And while filing as a "head of household" rather than just single if you have a family member or child living with you as a dependent can save you money on your taxes, there are a number of hurdles you have to clear, like paying for the majority of the household expenses, before you make that claim. So check the IRS rules on head-of-household status carefully to be sure you qualify before you check that box.