Filing Status is an important part of the calculation. A lot of the limitation amounts are dependent on the type of you filing status. Married Filing Joint is for a couple in which both spouses are U.S. citizens and decide to report their income together, as opposed to filing separately. In most cases it is more beneficial to file jointly, however some times it is more beneficial to file separately. If both spouses are U.S. citizens and they decide not to file jointly then the filing status is Married Filing Separately. In that case each one of them needs to file a tax return separately. Head of Household is either when one is an unmarried U.S. citizen that has children that are U.S. citizens, or when one is married to a non U.S. citizen and has children that are U.S. Citizens. Married Filing Separately is when one is married to a U.S. citizen and chooses not to file jointly; instead one is reporting only their income on the tax return.

Number of Children includes children that are U.S. Citizens, who lived in your house for more than half of the year, who are ages 16 or less as of the end of the tax year in question, and who did not provide more than half of their own support. Filer’s wages includes only wages or self employment income; this does not include any type of passive income or pension income. Passive income includes interest, dividends, capital gains, social benefits. However, if somebody runs an incorporated business and takes a salary from the corporation, that salary is considered wages. If the spouse is also a United States citizen then you may enter his/her wages. There are times that the refund is larger when adding the spouse’s wages and sometimes the refund is decreased; this is all based on the total amounts of income and wages. Please note that if you report the spouse’s income on the tax return then the filing status is Married Filing Jointly.

Total Additional Income includes all other income that is not wages or self employment. This includes passive income, pensions and anything else that is not wages or self employment. Do not the include wages or self employment in this box.