What Do I Need To File My Taxes

Us Tax Forms And Schedules Required For Expats

Please note that there are many other US income tax forms that may apply to a taxpayers situation. The forms below however are those that are most common for those Americans living in Canada that need to file US income tax returns:

1040 This is the main US income tax form that gets filed each year. It contains the name, address, dependents and income of the taxpayer. The form summarizes income and tax calculations for the year. Youll have the option of filing your tax return as single, married filing jointly, married filing separately or head of household.

In most cases, dual citizens living in Canada will file MFJ and US citizens with Canadian non-US citizen spouses would file MFS. In limited circumstances we might elect to have the non-US spouse file jointly, however this is quite rare. We also may use the head of household filing option in limited cases. In order to be eligible for head of household filing status a US citizen filer with a non-US spouse and a US dependent may make this filing status choice.

Schedule 1 through 6 I wont spend a lot of time on these schedules as they were introduced in the last few years to help consolidate information lines on the 1040 jacket and other forms. Most of the information on these schedules will come from other forms discussed below.

We convert income items such as pension, employment and business income on an average rate throughout the year. However, capital gains need to be converted at actual rates. For example:

Unclaimed Federal Tax Refunds

If you are eligible for a federal tax refund and dont file a return, then your refund will go unclaimed. Even if you arent required to file a return, it might benefit you to file if:

• Federal taxes were withheld from your pay

and/or

• You qualify for the Earned Income Tax Credit

You may not have filed a tax return because your wages were below the filing requirement. But you can still file a return within three years of the filing deadline to get your refund.

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Filing For An Extension

Any taxpayer can file for an extension. If you do so before April 18 2023, you will extend your filing deadline to October 16, 2023.

Dont confuse receiving an extension to file your returns with deferring your obligation to pay taxes you owe to the IRS. If you dont pay the taxes due by the filing deadline, you will incur penalties at the rate of 5% of the amount of the tax due for each month payment is not made.

If you are more than 60 days late with payment, youll be assessed a minimum penalty of $100, or 100% of the tax due with the return, whichever is less.

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Frequently Asked Questions On How To File Your Taxes

If you are not eligible to obtain a SIN, you need to apply for an ITN . . Mail your application form along with the supporting documents to the ITN Tax Unit. The ITN address is on the form.

If you do not file your tax return on or before the tax filing deadlines, the CRA will charge penalties and interest on the amount owing and on the penalty levelled starting on the day after your return is due.

If you are expecting a tax refund, there is no penalty to be paid. However, it is always better to claim your tax refund and to apply for any benefits and rebates you are entitled to before the end of tax season.

You can also log in to your Bear Tracks and click “Financials.” For employers other than the University, ask your supervisor. It is the law that all Canadian employers must provide these slips to their employees .

Donate For The Sake Of Donating

With year’s end also being “giving season,” many taxpayers give to charities or donate household goods, or even stock, as another way of lowering their tax liability. While this is a standard move, tax pros caution against charitable giving if your only intent is to lower your tax bill.

The main reason: You’ll only get a tax deduction for giving to charity if you itemize, which the vast majority of Americans don’t.

“Even a thousand-dollar charitable deduction is likely not enough to make you itemize rather than taking the standard deduction,” Slagle said.

Her advice: “Donate to donate don’t donate for the tax deduction. If it’s something you want to do, do it, regardless if you’ll benefit from a tax perspective.”

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Other Circumstances That Require You To File

If you are self-employed, you are required to file taxes if you earned more than $400 in self-employment income.

If you pay special taxes, then you must file even if you dont meet the filing threshold. Special taxes include additional taxes on qualified retirement plans or when you must pay taxes on tips you did not report to your employer.

In addition, you must file taxes if you or anyone in your household enrolled in health coverage through the Healthcare.gov Marketplace and you received premium tax credits in 2021.

If you have special tax considerations, you may want to use the IRS interactive tool to determine whether you need to file.

Types Of Tax Credits And Benefits

There are two types of tax credits:

Benefits can help with various living expenses, such as raising children, housing, loss of income and medical expenses.

Read the Canada Revenue Agency’s General Income Tax and Benefit Guide and Forms Book to learn more about which tax credits you can claim.

With the Ontario Child Care Tax Credit, you could get back up to 75% of your eligible child care expenses. It applies to eligible child care options, including care in centres, homes and camps.

The Low-Income Workers Tax Credit provides up to $850 each year in Ontario personal income tax relief to low-income workers, including those earning minimum wage.

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Is It Better To Gift A Car Or Sell It For $1

While some car owners consider selling the car for a dollar instead of gifting it, the DMV gift car process is the recommended, not to mention more legitimate, way to go. They might not like the car or might be offended by a hand-me-down gift. Be sure that they afford insurance and maintenance costs.

Irs Free File Now Accepting 2021 Tax Returns

COVID Tax Tip 2022-16, January 31, 2022

IRS Free File, available only through IRS.gov, is now accepting 2021 tax returns.

IRS Free File is available to any person or family with adjusted gross income of $73,000 or less in 2021. The fastest way to get a refund is by filing and accurate return electronically and selecting direct deposit. This year, there are eight Free File products in English and two in Spanish.

This program gives people an opportunity to file their taxes and claim the 2021 recovery rebate credit, the enhanced child tax credit, the earned income tax credit, and other credits. Taxpayers can also use Free File to claim their remaining child tax credit or any advance payments they did not receive in 2021. By law, the IRS cannot release earned income tax credit and additional child tax credit refunds until mid-February.

Additionally, IRS Free File users can use direct pay or electronic options to submit their tax payment if they owe a balance.

As an alternative, Free File Fillable Forms are electronic federal tax forms available to everyone, regardless of income. Only people who are knowledgeable and comfortable preparing their own tax return should use them.

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Do I Need To File An Income Tax Return Every Year

Contrary to popular belief, some people do not have to file a tax return every year. To put it bluntly, if you don’t owe the Internal Revenue Service and the IRS doesn’t owe you, you might not be required to file. For instance:

• You do not need to file if you are single, under the age of 65, and your gross income was below $12,400 as of 2022.
• You don’t need to file if you are married filing jointly, both spouses are under 65, and your joint income was less than $24,800.
• You don’t need to file if you are the head of the household and under age 65, and your gross income was less than $18,650.

It’s important to remember, though, that you may be missing out if you don’t file. If your income is low, you may be eligible for tax credits that you won’t know about unless you file. That means the IRS will pay you.

If you have any doubts about whether you need to file, the Internal Revenue Service supplies a short survey to help you figure it out.

Who Should File A Tax Return

Most U.S. citizens and permanent residents who work in the United States need to file a tax return if they make more than a certain amount for the year.

You may want to file even if you make less than that amount, because you may get money back if you file. This could apply to you if you:

• Have had federal income tax withheld from your pay
• Made estimated tax payments
• Qualify to claim tax credits such as the Earned Income Tax Credit and Child Tax Credit

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How Much Should Tax Preparers Charge For Their Services

For most preparers, this will vary wildly by the region in which they work. So, while theres no clear cut, silver bullet answer about how much a preparer should charge, there are some tips to get started.

• The National Society of Accountants cites the latest data on the average price for a 1040 preparation.
• Associations and professional groups, including collegiate accounting clubs, can be good resources to determine prices.
• Most preparers will call around and get quotes from other firms and then use that to make up their pricing system.

Once youve determined a competitive price for your context, consider whether you want to charge an hourly rate, or price your services with a fixed fee.

While an hourly rate may seem more intuitive at first , consider what will be the best way to make money when you become efficient. Why would you charge an hourly rate for a 1040 form that might take you 15 minutes to complete? Fixed fee or value billing is not about the time you spend on a clients preparation but instead focuses on the expertise and efficiency youve gained as a professional.

It takes the preparer a short amount of time because they are talented and efficient. And thats what clients are truly paying for your experience.

Benefits Of Filing A Tax Return

Get money back. In some cases, you may get money back when you file your tax return. For example, if your employer withheld taxes from your paycheck, you may be owed a refund when you file your taxes.

Avoid interest and penalties. You may avoid interest and penalties by filing an accurate tax return on time and paying any tax you owe in the right way before the deadline. Even if you can’t pay, you should file on time or request an extension to avoid owing more money.

Protect your credit. You may avoid having a lien placed against you when you file an accurate tax return on time and pay any tax you owe in the right way before the deadline. Liens can damage your credit score and make it harder for you to get a loan.

Apply for financial aid. An accurate tax return can make it easier to apply for help with education expenses.

Build your Social Security benefit. Claiming your self-employment income on your return ensures that it will be included in your benefit calculation.

Get an accurate picture of your income. When you apply for a loan, lenders will look at your tax return to figure your interest rate and decide if you can repay. If you file accurate tax returns, you may get a loan with a lower interest rate and better repayment terms.

Get peace of mind. When you file an accurate tax return and pay your taxes on time, you’ll know that you’re doing the right thing to follow the law.

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Do You Need To File A Tax Return

Here’s how to figure out if you should file a tax return this year:

• Look at your income to see if you made the minimum required to file a tax return
• Decide which filing status is best for you
• If you’re retired, find out if your retirement income is taxable
• Find out if you qualify to claim certain to lower the amount of tax you owe
• Use the Interactive Tax Assistant to see if you need to file

What Does A Tax Preparer Need To Prepare Tax Returns

Tax preparers need to efficiently and securely access and manage confidential information for their clients. As a result, most preparers look for software to manage their workflow effectively and efficiently.

Tax software should help preparers in the following ways:

• Learn. You cant know everything. There will always be knowledge gaps and questions from clients that you didnt anticipate. Professional tax software should increase your know-how, the ability to fill knowledge gaps with trusted and meaningful information for your daily work. Something to unstuck you when you dont know how to proceed.
• Research. Every client is different. And that means every answer you provide will need to be tailored to their specific questions and concerns. A tax research software solution can help get the answers when you need to go deeper and retrieve more information.
• Operate. Tax preparation requires a significant amount of day-to-day organization. You need tools to do the work and produce all the necessary forms. From document management solutions to e-filing assistance, tax software should make your operational duties easier, more productive, to do your job with confidence every time.

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Find Out If Your Tax Return Was Submitted

You can file your tax return by mail, through an e-filing website or software, or by using the services of a tax preparer. Whether you owe taxes or youre expecting a refund, you can find out your tax returns status by:

• at 1-800-829-1040

• Looking for emails or status updates from your e-filing website or software

If you file your taxes by mail, you can track your tax return and get a confirmation when the IRS has received it. To do so, use USPS Certified Mail or another mail service that has tracking or delivery confirmation services.

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Seek Professional Tax Help And Guidance

Owing money to the IRS is no joke, and dealing with the situation is not something you should try to tackle on your own. If you know you owe money to the IRS and cannot pay the bill in full, it is important to seek professional help and guidance.

A tax resolution expert can guide you through the process, helping you prepare, submit and negotiate a payment plan that works for you and the IRS doesnt get to manage your monthly cash flow. You also may qualify for an offer in compromise, which settles your case for less than the amount owed, but its important to act as quickly as possible you do not want your tax situation to get worse.

Hopefully, you will find a reason to smile when you file your taxes this year. Hopefully, you will find that you are due a refund, and you can begin making plans for the money that will soon arrive in your bank account.

If not, it is important to know what to do and which steps to take. If you owe money to the IRS, you need professional help and guidance, so call a tax relief expert right away to preserve your rights and your money.

Before you make a decision, let our firm see if we can help. We negotiate with the IRS day-in and day-out. We can potentially settle your tax debt for a lot less than you owe. Call us today to find out. Our tax resolution specialists navigate the IRS maze so you dont have to.

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