Friday, March 22, 2024

When Do We Need To File Taxes

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Do Expats Get The Child Tax Credit

When should you file your taxes? Financial advisor explains

Americans living abroad qualify for claiming the Child Tax Credit. This means you can generally claim a credit for the tax year 2021 worth up to $3,600 per child under 6 or $3,000 per child 6-17, though income limits apply. Expats who lived outside the U.S. for more than 6 months in 2021 can only receive a maximum Child Tax Credit refund of $1,400 per child.

Online Services Available To You

My Account is a secure, easy and convenient online tool that lets you view your income tax and benefit information and manage your tax affairs online. You can use My Account to:

  • Individual Tax Account Balance Automated Service Lets you quickly and securely check what you owe the CRA.
  • Check CRA processing times You can check estimated CRA processing times using the tool that is available on Canada.ca. The tool gives you processing times based on information selected in drop-down menus, and it indicates when a response can be expected for various programs. The information provided is the same as you would receive by calling the CRA.
  • Charlie the CRA chatbot Charlie answers general tax filing questions
  • Uncashed cheques The uncashed cheques service in My Account lets you view any of your uncashed tax cheques from the CRA. The service lets you ask for a replacement payment and gives you payment options
  • Personal identification number You can create a PIN when you call the CRA on the individual tax enquiries and the benefit enquiries lines. A PIN is a fast and secure way to identify yourself when you call us, and it can help us determine if someone is impersonating you. You can create a PIN in My Account or with the help of one of our agents

Why Do We Have To File For Taxes

Why Do We Have To File For Taxes Taxes are significant for a country, especially if the government does not have any other businesses. Furthermore, it will be the only way people can earn money from it. It would help if you also kept in mind that the countries that will collect taxes will have to put a bank on the people to run the country successfully.

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When Does A Senior Citizen On Social Security Stop Filing Taxes

OVERVIEW

The IRS typically requires you to file a tax return when your gross income exceeds the standard deduction for your filing status. These filing rules still apply to senior citizens who are living on Social Security benefits. However, if Social Security is your sole source of income, then you don’t need to file a tax return.

Key Takeaways

If the only income you receive is your Social Security benefits, then you typically don’t have to file a federal income tax return.

If you are at least 65, unmarried, and receive $14,250 or more in non-exempt income in addition to your Social Security benefits, you typically must file a federal income tax return .

If you are 65, married, and file a joint return with a spouse who is also 65 or older, you typically must file a return if your non-exempt income is $27,800 or more .

If the sum of half your Social Security plus your adjusted gross income plus your tax-exempt interest and dividends exceeds $25,000 for single filers , then a portion of your Social Security benefits are included in gross income and you might need to file a tax return.

Do Expats Have To Pay Us Taxes

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Yes. If you are an American expatriate , someone who moved from the U.S. and now lives abroad, you will need to file a U.S. tax return if you earned above the minimum income threshold.

These gross income thresholds typically amount to the Standard Deduction amount for your filing status and age. These amounts are set each year by the federal government and are designed to index with inflation.

The Standard Deduction, along with other available deductions, reduces your income to determine how much is subject to income taxes. Generally, if you dont have a specific type of income that requires you to file a return, such as a self-employment income, you won’t need to file a tax return if your income is less than your Standard Deduction.

For example, in 2021, you typically don’t need to file a tax return if all of the following are true for you:

  • Don’t have any special circumstances that require you to file
  • Earn less than $12,550

Also Check: How Much Is The First Time Home Buyers Tax Credit

Should I File A Tax Return Even If Im Not Technically Required To

There are some cases where its advisable to file a tax return anyway, even if you could legally decline.

First, if you had federal income tax withheld from your pay, or if you made estimated tax payments, you should file in order to get any surplus withholding refunded back to you.

Second, there are a few tax that can give you a refund even if you didnt make enough income to file. These are called refundable credits. Nonrefundable credits can only apply against taxes you owe.

  • Earned Income Tax Credit You could qualify for the EIC if you worked a low-income job. Your credit amount will depend on income level, filing status and how many dependents you claim.
  • Child Tax Credit If you have a qualifying child, the full Child Tax Credit is now refundable.
  • Additional Child Tax Credit This credit could be available if you have at least one qualifying child and you didnt receive the full amount from the Child Tax Credit.
  • American Opportunity Credit Students in their first four years of postsecondary education could qualify for this credit, up to $1,000 of which is refundable.

With these credits, you have to file in order to receive the benefit.

Types Of Taxable Income

You have to report any taxable income you earn inside and outside Canada when you file your tax return. This includes:

  • any full-time or part-time work
  • self-generated income
  • rental income, including renting out a portion of your home

You do not have to report certain non-taxable amounts as income, including:

  • elementary, secondary and post-secondary school scholarships

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When You May Want To Submit A Tax Return To Claim A Tax Refund

With all the above being said, there are years when you might not be required to file a tax return but may want to. If you have federal taxes withheld from your paycheck, the only way you can receive a tax refund when too much was withheld is if you file a tax return.

  • For example, if you are a single taxpayer whos only income is earnings of $2,500 from a job, with $300 withheld for federal tax, then you are entitled to a refund for the entire $300 since you earned less than the standard deduction.
  • The IRS doesn’t automatically issue refunds without a tax return. So if you want to claim a tax refund then you should file a tax return.

Remember, with TurboTax, we’ll ask you simple questions about your life and help you fill out all the right tax forms. With TurboTax you can be confident your taxes are done right, from simple to complex tax returns, no matter what your situation.

Do American Expats Have To File A State Income Tax Return

Filing Taxes 101: Everything You NEED to Know

Whether you need to file a state income tax return depends on whether your state of residence requires you to file a state income tax return, the rules of your state, and whether youve earned or received income originating from that state. Its possible that you need to file a state income tax return while living abroad, but you should consider consulting with a tax professional who specializes in expat tax matters for your state to be sure.

Generally, when you are no longer a resident of a state or no longer earn or receive income originating from the state , you typically dont need to file a tax return for that state. However, if this happens in the middle of the year then you might need to file as a part-year resident.

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How Can I File My Taxes

The IRS accepts tax returns filed one of two ways:

  • Through the mail
  • Electronically through e-file
  • A reported 88% of individual tax returns are e-filed per year. Any tax return filed by a tax professional in an H& R Block tax office, using the H& R Block tax software, or through the H& R Block online filing program is usually e-filed. However, you can always choose to have your return printed to mail yourself.

    E-file is the quickest filing method and typically helps you receive a tax refund faster.

    Do You Need To File A Tax Return

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

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    Do I Need To File Even If Im Not Required To By Filing Status Age And Income Level

    In some cases, yesyou will still need to le a tax return if any of the following apply:

    • You owe any taxes, such as alternative minimum tax, taxes on a retirement plan distribution, household employment taxes, and Social Security and Medicare taxes that were not withheld from income.
    • Repayment of the First-Time Homebuyer Credit.
    • You received a distribution from a health savings account, Archer MSA, or Medicare Advantage MSA.
    • You had at least $400 in self-employment income.
    • You earned $108.28 or more from a church or qualified church-controlled organization that is exempt from employer Social Security and Medicare taxes.
    • You received an advance payment of the Premium Tax Credit for health insurance bought from a health insurance marketplace. You should receive Form 1095-A with the amount of the advance payments.
    • Advance payments of the Health Coverage Tax Credit were made for you, your spouse or a dependent. You should receive Form 1099-H with the amount of the advance payments.
    • You are required to file Form 965-A for an elected installment payment.
    • You are claimed as a dependent, but your income exceeded the filing requirement threshold.

    We Provide Qualified Tax Support

    Do you still need to file your taxes? We are offering drop

    E-file’s online tax preparation tools are designed to take the guesswork out of e-filing your taxes. Our program works to guide you through the complicated filing process with ease, helping to prepare your return correctly and if a refund is due, put you on your way to receiving it. Should a tax question arise, we are always here help and are proud to offer qualified online tax support to all users.

    If you’ve ever tried calling the IRS during the tax season, you probably know that telephone hold times at peak periods can be hours long. Our dedicated support team enables customers to get their questions answered just minutes after a question is sent, even during peak times. Simply send us a “help” request from within your account and our experts will begin working on your problem and get you an answer as quickly as possible. Prefer to call us? We also provide full telephone support to all taxpayers filing with our Deluxe or Premium software.

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    Irs Rules Regarding Your Age

    As the table above indicates, individuals younger than age 65 must file if they make certain amounts. The earnings threshold amounts go up a bit for individuals 65 and up.

    For married couples that file separate tax returns, the earnings target is based on the age of the older spouse.

    In most situations, your age for tax purposes depends on how old you were on the last day of the year. But when it comes to determining whether you have to file a return, the IRS says that if you turned 65 on New Years Day, you are considered to be 65 at the end of the previous tax year. The one-day grace period allows you to use the higher-income thresholds to determine whether you must file a tax return.

    Do I Need To File A Tax Return

    You may not have to file a federal income tax return if your income is below a certain amount. But, you must file a tax return to claim a refundable tax credit or a refund for withheld income tax. Find out if you have to file a tax return.

    If you find out you need to file a tax return, learn how the process works, when your return is due, and more.

    Read Also: Why Do I Have To Mail My Tax Return

    Its Not Too Late To File Your Tax Return

    Although the regular tax season is over, you can still file a late tax return until October 15, 2022. If you do not file you may miss out on a refund or any tax credits for which you may be eligible.While theres no penalty for filing late if you do not owe taxes, you could face fees and penalties if you do owe for 2021. The information below can help you navigate this process and complete your return before the final deadline.

    Watch For Your Income Documents To Arrive

    C corp need to file a DBA name?

    You should receive forms about how much income youve earned from your employers and other income sources in January or February. If you are a full-time employee, you will receive a Form W-2 detailing your earnings, as well as which taxes were withheld. If you work freelance or on a contract, you may receive a Form 1099-NEC detailing what you earned. You may also receive documents showing dividends or interest earned on investments , or student loan interest youve paid . If youre a college student , youll receive a Form 1098-T that shows how much you paid in tuition, as well as any amounts you received from grants or fellowships, to help you figure out deductions and credits related to education expenses.

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    File Electronically In Just Minutes And Save Time

    We know that filing your taxes can sometimes be unpleasant. That is why our helpful online tax preparation program works with you to make the filling process as pain-free as possible. Many filers can use our online tax software to electronically file their taxes in less than 15 minutes.

    To use the E-file software, a visitor simply needs to create a free account , enter their taxpayer information, income figures, then any deductions they may have, and our software will calculate and prepare the return. Once a user has completed preparing their return they will be provided the option of either e-filing or printing and mailing. It’s as simple as that.

    Foreign Tax Credit Or Foreign Tax Deduction

    The Foreign Tax Credit is a method American expats can generally use to offset foreign income taxes youve already paid abroad on a dollar-for-dollar basis. U.S. citizens and resident aliens who pay income taxes to a foreign government or U.S. possession can typically claim the credit, thus reducing your U.S. tax liability and avoiding most double taxation on the same income.

    The foreign income covered by the tax credit includes:

    Instead of claiming credit for eligible foreign taxes, you can choose to deduct foreign income taxes that you paid. This means you can take the benefit as a tax credit or as a tax deduction depending on which one is best for you.

    When taken as a credit:

    • The credit directly reduces your U.S. tax liability
    • You claim the credit on your tax return and attach a completed Form 1116

    When taken as a deduction:

    Generally, you can only claim a foreign tax credit or a deduction in any given yearyou cant claim both in the same tax year. However, even if you take one for the current year, you can take the other for the following year.

    Maximize your deductions and get every tax break you qualify for when you file your taxes with TurboTax Deluxe. We’ll search over 350 tax deductions and credits to make sure you get the maximum refund possible. Start for free, and get up to an additional $10 off TurboTax Deluxe when you file.

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    Who Should File A Tax Return

  • Tax Exempt Bonds
  • 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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