Who Needs to File With the IRS?
April 15th creates annual dread for many U.S. citizens as it's the IRS deadline for filing income taxes. However, not everyone is required to file. Having an awareness of the filing requirements as well as resources to get additional in-depth information can ease the anxieties brought on by tax preparation.
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Initial Requirements
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According to the Internal Revenue Service, the rules for filing income tax returns apply to "all U.S. citizens, regardless of where they live, and resident aliens." A U.S. citizen is defined as an individual born in the United States, whose parent is a U.S. citizen, is naturalized, or born in Puerto Rico, the U.S. Virgin Islands or Guam. A resident alien is defined as a person lawfully, permanently residing in the U.S. and issued a green card by the Bureau of Citizenship and Immigration Services. A person physically present in the United States for 31 days during the current tax year and 183 days during a three-year period including the current year and previous two years is also defined as a resident alien for tax purposes.
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There are gross income requirements that trigger your need to file with the IRS. The IRS defines gross income as "money, goods, property and services that are not exempt from tax." Your filing status and age (under 65 or 65 or older) are also contributing factors. As of 2008, a single person under 65 with a gross income of $8,950 must file a tax return. A single person 65 or older with a gross income of $10,300 is also required to file. Those married couples filing jointly must file if their gross income is between $17,900 and $20,000 depending on the age of both spouses. A person who is married but filing separately must file if her gross income is $3,500 regardless of age. For those filing as head of household or qualified widow(er), the gross income thresholds range from $11,500 to $15,450. Refer to "Five Filing Status Possibilities" in the resource section below to determine if you qualify for these categories.
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Children and Other Dependents
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Even if you can be claimed as a dependent on another's return (for example, a parent or someone else), there is still a possibility that you must file with the IRS. There are many factors considered in this determination including whether you're single or married, 65 years or older and/or blind. The IRS considers both earned and unearned income in its filing rules for children and other dependents. Refer to "Do You Need to File a Federal Income Tax Return?" in the resource section below for a useful tool in determining who in this category must file a tax return.
Other Situations
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As of 2008, your are required to file with the IRS if any of the following apply: you owe special taxes like alternative minimum tax, and/or Social Security and Medicare tax on unreported tips and wages; you received advanced earned income credit payments from your employer (shown on your W-2 in box 9); you were self-employed earning at least $400; or you earned $108.28 as an employee of a church or qualified church-controlled organization.
IRS Flow Chart
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The IRS website offers an easy-to-follow guide to help you determine whether or not you are required to file with them. The guide, "Do You Need to File a Federal Income Tax Return?", is listed in the resource section below. By answering the series of yes/no questions regarding your specific situation, you'll determine your need to file.
Refunds
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Even if you're not required by the IRS to file, if you are owed a refund, by all means, file your return. It's the only way to get your refund. You can use the shortened 1040EZ form for this, provided you're a single or joint filer with no dependents.
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