Get Ready To File Your 2019 Taxes
Visit IRS.gov for steps you should take now for the 2019 tax filing season.
Because of changes in the tax law, refunds or tax bills may be different this year. To avoid surprises, you should do a Paycheck Checkup to help you decide if you need to adjust your withholding.
- Make sure you have all needed documents before filing, including your:
- 2017 return
Four Factors That Impact Income Thresholds
Four factors determine whether you must file, and each circumstance has its own gross income threshold. The four factors are:
- Whether someone else claims you as a dependent
- Whether you’re married or single
- Your age
Some of these factors can overlap, which can change the income thresholds for required filing.
How Do I Update My Mailing Address Or Direct Deposit Info
Parents have until the next deadline,;, to update banking and mailing information ahead of the October check. The IRS recommends using direct deposit to get future payments more quickly. Eligible parents who have banking information on file from stimulus checks or tax refunds with the IRS should have received money via direct deposit. If the IRS doesn’t have your account information, you can submit it using the;Child Tax Credit Update Portal;for the October payment. Any changes after this date won’t take place until the November advance check.;
If you don’t;add your banking information;in time, look out for a check mailed to the address that the IRS has on file for you — just like a mailed tax refund. And the good news is that you can now use the Update Portal to;update your mailing address. The IRS plans to continue expanding the functionality of that portal so you’ll be able to update your income and number of kids in the near future.;
A commenter in a;Reddit thread in July;says they were told the IRS is having a few issues with the child tax credit checks but is working to resolve them. If you’re waiting on your payment and the portal says it’s “Pending,” keep holding on. A check should be coming your way soon via direct deposit or mail. After a week, you can try to contact the IRS, or eventually do a payment trace.
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Should I File A Return Anyway
Even if youre not required to file, sometimes its in your own best interest to do so anyways, for the following reasons;
- You want to claim a refund.
- Entries on your tax return determine if youre eligible for certain federal and provincial benefit programs. Even if you had no income, you still may qualify for the GST/HST Credit, or provincial benefits such as the Ontario Trillium Benefit. You can find a complete list of provincial benefit programshere.
- Your RRSP contribution limit starts growing as soon as you earn any income. Even if youre not expecting a refund, the more RRSP contribution room, the better.
- If you want to claim the Canada Workers Benefit or if you want to continue receiving your;Canada Child Benefit
- If you attended school and have eligible tuition fees, you must declare the amounts on your tax return, even if you are not using them. You might not need to use the credits this year, but in order to carryforward or transfer them, they must be reported on your current year tax return.
- If you or your spouse want to continue to receive Guaranteed Income Supplement on your Old Age Security payments.
With more than 20 years experience helping Canadians file their taxes confidently and get all the money they deserve, TurboTax products, including TurboTax;Free, are available at www.turbotax.ca.
B Which Income To Report
A nonresident alien’s income that is subject to U.S. income tax must generally be divided into two categories:
- Income that is Effectively Connected with a trade or business in the United States
- U.S. source income that is Fixed, Determinable, Annual, or Periodical
Effectively Connected Income, after allowable deductions, is taxed at graduated rates. These are the same rates that apply to U.S. citizens and residents. Effectively Connected Income should be reported on page one of Form 1040-NR, U.S. Nonresident Alien Income Tax Return.; FDAP income is taxed at a flat 30 percent and no deductions are allowed against such income. FDAP income should be reported on page four of Form 1040-NR.
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Knowing Your Tax Obligations
Understanding the IRSs annual threshold limits is a primary factor in determining whether or not you must file a tax return each year. Most individuals will have similar tax scenarios from year to year, which can be helpful in knowing and understanding your tax obligations.
However, some people may experience drastic changes from year to year as a result of a drop in income from a lost job, a marriage, new children, or even a jump in income when moving beyond dependency or higher education. The IRS provides detailed information each year for every scenario, so the key is staying up to date on the requirements relative to your personal situation. You should also maintain a record of your returns for up to six years.
What You Need To File Your Taxes
What documents do you need to file your taxes?
- Personal Information You will need to social security numbers and birthdates of everyone included on your tax return. If you want your return to be direct deposited in your account, you will need to have your bank account number and routing number available. Dont forget to bring your state-issued ID card or drivers license if you would like to file electronically!
- Last Years Tax Return Forms If you want to submit your tax return electronically, you need to have last years Adjusted Gross Income or PIN. One way to make sure you have that information is by bringing your 2016 1040 form. The State or Federal 1040 form will have your 2016 AGI on it, so you can easily file electronically.
- Income Documents This can include any Earned Income statements like W-2 forms, Retirement Distribitions like 1099-R SSA-1099 and other 1099 forms, Business Records of payments, Miscellaneous Income documents like 1009-G and alimony payment forms and many other income forms.
- Healthcare Coverage Documents Forms 1095-A,1095-B and 1095-C show your healthcare coverage status through the Marketplace or employer.
- Expense Records Bring your records for child and dependent care, medical and dentla, Health Savings Account contributions, post-secondary education expenses and other applicable expenses.
For more information about documents you may need to bring,
How can I file with SC Thrive?You can file your taxes with SC Thrive two ways:
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What If I Only Receive Social Security Benefits
In most cases, if you only receive Social Security benefits you wouldn’t have any taxable income and wouldn’t need to file a tax return.
One catch with Social Security benefits is if you are married but;file a separate tax return from your spouse who you lived with during the year.; Then you will always have to include at least some of your Social Security benefits in your taxable income to see if it is greater than your standard deduction.
When To Pay Estimated Taxes
For estimated tax purposes, the year is divided into four payment periods. You may send estimated tax payments with Form 1040-ES;by mail, or you can pay online, by phone or from your mobile device using the IRS2Go app. Visit IRS.gov/payments to view all the options. For additional information, refer to Publication 505, Tax Withholding and Estimated Tax.
Using the Electronic Federal Tax Payment System is the easiest way for individuals as well as businesses to pay federal taxes. Make ALL of your federal tax payments including federal tax deposits , installment agreement and estimated tax payments using EFTPS. If its easier to pay your estimated taxes weekly, bi-weekly, monthly, etc. you can, as long as youve paid enough in by the end of the quarter. Using EFTPS, you can access a history of your payments, so you know how much and when you made your estimated tax payments.
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You Could Lose Your Deductions And Credits
To get the benefit of any allowable deductions or credits, you must timely file a true and accurate income tax return. For this purpose, a return is timely if it is filed within 16 months of the due date just discussed. The Internal Revenue Service has the right to deny deductions and credits on tax returns filed more than 16 months after the due dates of the returns. For additional details, refer to When To File in the Filing Information chapter of Publication 519, U.S. Tax Guide for Aliens.
How Much Should You Pay Each Quarter
Making your payments every quarter is an exercise in estimation. Thats why theyre called quarterly estimated tax payments. The IRS expects you to pay at least 90% of what you owe throughout the year. If you owe too much, you might actually be penalized too.
You can figure your quarterly payments by using Form 1040-ES. It includes a worksheet that helps you figure out your current tax liability, based on how much money you have made during the quarter and estimate to make during the year. It even includes a section to help you figure what you owe for self-employment tax, if that applies to you.
Its much easier, though, to just take what you owed in taxes the previous year and divide it by four. Known as the safe harbor rule, the IRS will waive any penalties levied at tax time as long as you pay 100% of what you owed the previous year. Unless your income is going to dramatically change form year-to-year, this is often your best course.
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.
Federal Tax And Credits
Complete Step 5 of your return to calculate your federal tax and any credits that apply to you.
Schedule;A, Statement of World Income
You have to complete Schedule;A to report your world income. World income is income from Canadian sources and sources outside Canada. Your net world income, which is shown on Schedule A, is used to determine your allowable amount of non-refundable tax credits on Schedule;B .
Your income from sources outside Canada is reported only on your Schedule;A.
Federal non-refundable tax credits
These credits reduce your federal income tax. However, if the total of these credits is more than your federal income tax, you will not;get a refund for the difference.
The non-refundable tax credits you can claim depend on the portion of net world income ;included in net income .
Schedule;B, Allowable Amount of Non-Refundable Tax Credits
Complete Schedule;B to;calculate the allowable amount of non-refundable tax credits you can claim.
If the result from line;A of Schedule;Bis;90% or more, you can claim all the federal non-refundable tax credits that apply to you. Your allowable amount of non-refundable tax credits is the amount on line;35000 of your return.
If the result from line A of Schedule B is less than 90%, you can claim the following applicable federal non-refundable tax credits if you are reporting Canadian-:
Your tuition, education, and textbook amounts
If you have no Canadian source income, tuition fees paid in 2020 cannotbe claimed.
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When Social Security Benefits May Be Taxable
When determining whether you need to file a return and you receive Social Security benefits, you need to consider tax-exempt income because it can cause your benefits to be taxable even if you don’t have any other taxable income.
Here’s an example of where you may need to file, even with tax-exempt income:
- You are under age 65 and receive $30,000 in Social Security benefits, but also receive another $31,000 in tax-exempt interest. $14,700 of your Social Security benefits will be considered taxable income.
- This is greater than your standard deduction and you would need to file a tax return.
To figure out if your Social Security benefits are taxable:
- Add one-half of the Social Security income to all other income, including tax-exempt interest.
- Then compare that amount to the base amount for your filing status.
- If the total is more than the base amount, some of your benefits may be taxable.
TurboTax;can help you estimate if you’ll need to file a tax return and what income will be taxable.
Filing Your Income Tax Return
Annually, you need to complete the;T1 General Income Tax and Benefit Return;as well as associated territorial or provincial forms. In order to complete your return, you also will likely need to complete schedules or additional forms that request more information.;Schedules should be attached to your income tax return in most cases.
For example,;if you split pension income with your spouse, the CRA requires you to complete and submit;form T1032. In most cases, you need to;attach these forms;to your income tax return;when you file it, and you should;make copies for your records.
However, in cases;where a form establishes a long-lasting condition,;you typically do not have to file it each year.
- For example, if you are applying for the;Disability Tax Credit , you only need to submit;Form T2201;for the;first year.
- Once you are approved for the credit, you do not have to submit the form for subsequent years unless CRA requests you to do so. Quite often the DTC will only be approved for a limited number of years, such as 5 or 10. CRA will send you a letter stating that your period of approval has ended and that you need to submit a new T2201 before filing your next tax return.
- You can check the status of your Disability Tax Credit approval at any time by signing into your CRA My Account and clicking on Benefits & Credits.
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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
- your pension
You do not have to report certain non-taxable amounts as income, including:
- elementary, secondary and post-secondary school scholarships
Coronavirus Unemployment Benefits And Economic Impact Payments
You may have received unemployment benefits or an EIP in 2020 due to the COVID-19 pandemic.
Unemployment compensation is considered taxable income. You must report unemployment benefits on your tax return if you are required to file.;
If you received the EIP, you do not need to report it as income whether youre required to file a tax return or not. If you did not receive some or all of your stimulus payments, you may claim missing stimulus money that you are owed by filing for a Recovery Rebate Credit on your 2020 return.
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Coronavirus Tax Relief For Self
Coronavirus Aid, Relief, and Economic Security Act permits self-employed individuals making estimated tax payments to defer the payment of 50% of the social security tax on net earnings from self-employment imposed for the period beginning on March 27, 2020 and ending December 31, 2020. This means that 50% of the social security tax imposed on net earnings from self-employment earned during the period beginning on March 27, 2020, and ending December 31, 2020, is not used to calculate the installments of estimated tax due. Please refer to Publication 505, Tax Withholding and Estimated Tax, for additional information.
Electing Under Section 2183
If you as a non-resident investor have Canadian mutual fund investments with;15% tax withheld from assessable distributions paid or credited to you, both the assessable distributions and the withholding tax will be shown on an NR4;slip, Statement of Amounts Paid or Credited to Non-Residents of Canada. Generally, this;15% tax on the assessable distributions is considered the final tax obligation to Canada on that income.
If you have a loss;on your disposition of a Canadian mutual fund investment, you can apply your loss to offset any assessable distributions paid or credited to you after;2004, as long as;your loss does not exceed your total assessable distributions paid or credited to you on the investment. To apply the loss, you must file a Part;XIII.2 tax return.
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What Date Is Your 2020 Tax Return Due
Generally, your return for;2020 has to be filed on or before April;30,;2021.
If you or your spouse or common-law partner carried on a business in Canada in;2020 , your return for;2020 has to be filed on or before June;15,;2021. However, if you have a balance owing for;2020, you have to pay it on or before April;30,;2021.
If you are filing a Canadian tax return for someone who died in;2020, the due date may be different.;For more information, see Guide T4011, Preparing Returns for Deceased Persons.
If you are filing an elective return under section;216 or section;217 of the Income Tax Act, see Guide T4144, Income Tax Guide;for Electing Under Section;216, or Pamphlet T4145, Electing Under Section;217 of the Income Tax Act, for the due dates of these types of returns.
Exception to the due date of your return
When a due date falls on a Saturday, Sunday, or public holiday recognized by the CRA, your return is considered on time if the CRA receives it or if it is postmarked on the next business day. For more information, go to Important dates for individuals.
Send your completed return to your designated tax centre. If you are an actor in the film and video industry and are electing to file a Canadian tax return under section;216.1 , send your return to the;Film Services Unit. For more information, go to Film and Media Tax Credits.