WHO SHOULD FILE A TAX RETURN?
If you are a U.S. citizen and receive income you may be required to file an individual tax return, Form 1040.
WHEN SHOULD YOU FILE YOUR TAX RETURN?
The individual income tax return is due April 15th. If the 15th falls on a weekend or holiday, then the due date is the next business day.
Please Note: Taxpayers will get a three-month reprieve to July 15 to file their 2019 income tax returns as part of the federal government’s coronavirus response.
WHAT IF YOU SHOULD HAVE FILED AND DIDN’T FILE?
If you or someone you know needs to file past due tax returns, regardless of your reason for not filing, file your tax return as soon as possible. If you’re required to file and owe a balance, but you can’t pay all of the tax due on your return, the IRS may be able to help you establish a payment agreement. There’s no penalty for failure to file if you’re due a refund. However, you risk losing a refund altogether if you file a return or otherwise claim a refund after the statute of limitations has expired. An original return claiming a refund must be filed within 3 years of its due date for a refund to be allowed in most instances.
HOW DO YOU FILE A TAX RETURN?
You may be eligible to use free tax software that will take the guesswork out of preparing your return. Go to IRS.gov/FreeFile. See if you qualify to use brand-name software to prepare and e-file your federal tax return for free.
The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who generally make $56,000 or less. Go to IRS.gov/VITA, download the free IRS2Go app, or call 800-906-9887 to find the nearest VITA location for free tax return preparation.
WHAT IS GROSS INCOME*?
- Wages, salaries, and tips
- Interest and/or dividends, such as amounts earned on a balance held at a bank
- Money received from a retirement account, a pension, or an annuity
- Social security, sometimes
- Money received from sale of stock
- Add all the above = gross income*
It is worth noting that you may receive payments from the placement agency or state/local governments on behalf of a foster child in your care. These payments are not taxable income to you and would not be considered in the calculation of gross income.
However, living allowance stipends, such as those received from the placement agency, state/local governments, or AmeriCorps, are considered taxable income.
HOW DO YOU DETERMINE FILING STATUS?
You are a MARRIED filer, if you can say yes to any of these:
You were married at the end of the year, even if you didn’t live with your spouse.
Your spouse died in the current year and you didn’t remarry in the current year.
You are a HEAD OF HOUSEHOLD filer, if:
You are unmarried and provide a home for a dependent.
You are a SINGLE filer, if you can say yes to any of these:
You were never married.
You were legally separated according to your state law under a decree of divorce or separation at the end of the year.
You were widowed before the beginning of the year and you didn’t remarry.
WHAT IS CONSIDERED SUPPORT?
Out-of-pocket expenses incurred by you for caring for the foster child are considered support. It is worth noting, payments received from the placement agency or state/local governments are not considered income to you and are also not considered to be support you’ve provided for the foster child.
WHAT IS THE EARNED INCOME TAX CREDIT?
The Earned Income Tax Credit, EITC, is a benefit for working people with low to moderate income. EITC reduces the amount of tax you owe and may give you a refund.
For year 2019, if you had earned income from working for someone else of $55,952 or less, then you may qualify to receive an EITC. In addition:
- All individuals listed on your tax return must have a Social Security number
- You must be a U.S. citizen
- You have a qualifying child (see ‘Who Is a Dependent’ infographic above) OR
- be age 25 but under 65 at the end of the year, live in the United States for more than half the year, and not qualify as a dependent or a qualifying child of another person.
For help in determining if you are eligible for the EITC, go to IRS.gov/EITC and click on “EITC Assistant.” This service is available in English and Spanish.
Author: Nissa Rundberg, CPA, MST, Tax Manager, Clifton Larson Allen LLP
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