Given this informations, what is the most advantageous filing status? • Hailey is 32 years old and married to Liam. Liam passed away on February 2, 2021. Hailey has not remarried. • Hailey's nine-year-old daughter, Olivia, lived with her the entire year. • Hailey paid more than half the cost of keeping up a home and support for Olivia. • Hailey took a distribution from her traditional IRA in January to pay for her new roof. • Hailey was a full-time high school teacher and earned $45,000 in wages. Hailey purchased supplies including masks and hand sanitizer for her class out of her own pocket totaling $450. • Hailey received a W-2G in the amount of $2,500 from the local casino. • Hailey paid child and dependent care expenses for Olivia while she worked. • Hailey and Olivia are U.S. citizens and have valid Social Security numbers. They lived in the United States for the entire year. • If Hailey is entitled to a refund, she would like to deposit half into her checking account and half into her savings account. Documents from Adelphi Bank and Trust show that the routing number for both accounts is 111000025 and her checking account number is 123456789.

Based on the information provided, the most advantageous filing status for Hailey for the tax year in question would likely be "Qualifying Widow(er) with Dependent Child." This status is available to a taxpayer whose spouse died in the previous tax year (in this case, 2021), and who has a dependent child. Since Hailey has not remarried and has a dependent daughter, Olivia, she would generally be eligible to use this status for two years following the year of her husband's death, assuming she meets the other requirements. This filing status allows Hailey to use the married filing jointly tax rates and the highest standard deduction amount (if she does not itemize deductions), which can result in lower taxes than filing as Single or Head of Household. Regarding her other tax-related matters: - The distribution from her traditional IRA may be subject to income tax and potentially an early withdrawal penalty if she is under age 59½, unless an exception applies (such as using the funds for a first-time home purchase or certain unreimbursed medical expenses). - As a teacher, Hailey may be able to deduct up to $250 of unreimbursed classroom expenses even if she doesn't itemize deductions. - The $2,500 from the W-2G will need to be reported as gambling income. - Child and dependent care expenses may qualify her for the Child and Dependent Care Credit. - The ability to split her refund into two accounts can be arranged by using IRS Form 888

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