Chapter 2 - Filing Requirements Flashcards
Taxpayers age 65 or older and/or blind are entitled to increase their standard deduction by the following amounts:
$1,850 (per condition) for single taxpayers and heads of households.
$1,500 (per condition) for taxpayers filing married filing jointly, married filing separately, and qualified surviving spouse.
Gross income filing requirements
Single under age 65 - income at lease $13,850
Single 65 or older- income at lease $15,700
MFJ both under age 65 - income at lease $27,700
MFJ one 65 or older - income at lease $29,200
MFJ both 65 or older- income at lease $30,700
MFS regardless of age - $5
HOH under age 65 - income at least $20,800
HOH 65 or older- income at least $22,650
QSS under age 65 - income at least $27,700
QSS 65 or older- income at least $29,200
For a dependent taxpayer under age 65, the standard deduction is equal to the greater of the following, plus an additional amount if the dependent is blind:
$1,250, or
Their earned income plus $400 (not to exceed)
$13,850 if Single (S) or Married Filing Separately (MFS).
$27,700 if Married Filing Jointly (MFJ) or Qualifying Surviving Spouse (QSS).
$20,800 if Head of Household (HOH).
The greater of those two items is increased by an additional $1,850 ($1,500 if married) for each dependent who is blind. In the case of married taxpayers filing MFJ who are dependents of another taxpayer, they would increase their standard deduction by $1,500 for each spouse who is blind. Since they are dependents, under age 65 and both blind, their standard deduction would be increased by $3,000.
For a dependent taxpayer age 65 or older and/or blind, the standard deduction begins with the greater of the following:
$1,250.
Their earned income plus $400 (not to exceed)
$13,850 if Single (S) or Married Filing Separately (MFS).
$27,700 if Married Filing Jointly (MFJ) or Qualifying Surviving Spouse (QSS).
$20,800 if Head of Household (HOH).
The greater of those two items is increased by an additional $1,850 ($1,500 if married) for dependents who are age 65 and for dependents who are blind. This amount is for each occurrence of age 65 or older and blindness.
Kiddie Tax
If a child is under the age of 19, or a full-time student under the age of 24, at the end of the tax year, and the child’s only income is interest and dividends, a parent may be eligible to elect to include the child’s income on the parent’s return, which in turn releases the child from filing an income tax return.
A parent can make this election if the following conditions are met:
The child is under the age of 19; or under the age of 24 at the end of the tax year, if the dependent is a full-time student as defined in the instructions to Form 8814, Parents’ Election to Report Child’s Interest and Dividends.
The child had income only from interest and dividends, including capital gain distributions or Alaska Permanent Fund dividends.
The child’s gross income was less than $12,500. (In this case, their gross income would only be the interest and/or dividend income they have.)
The child is required to file a return, unless the parent makes this election.
The child does not file a joint return for the year.
No estimated tax payment was made for the year, and no overpayment from the previous year (or from any amended return) was applied to this year under the child’s name and social security number.
No federal income tax was withheld from the child’s current-year income under the backup withholding rules.
When you should or must file
Even if a taxpayer is not required to file, they should file a return to request a refund if they:
Had federal income tax withheld.
Made estimated tax payments.
Qualify for the:
Earned Income Credit (EIC).
Child Tax Credit (CTC) or Additional Child Tax Credit (ACTC).
Premium Tax Credit (PTC).
American Opportunity Tax Credit (AOTC).
There are circumstances under which a return must be filed, even if the taxpayer does not meet the gross income filing requirements. The most common situations arise when an individual:
Owes uncollected social security or medicare tax on tips not reported to the employer, or on wages the taxpayer received from an employer who did not withhold these taxes.
The taxpayer received Health Savings Account (HSA), Archer MSA (Medical Savings Account), or Medicare Advantage MSA distributions during the tax year.
Has net earnings from self-employment of $400 or more. Self-employment income is generally income earned by a taxpayer who owns a business and files a Schedule C, Profit or Loss From Business.
Blindness
A taxpayer may claim the additional standard deduction for blindness if they are totally or partly blind at the close of the tax year and do not itemize. Remember, we mentioned above that taxpayers may choose to itemize deductions or they may use the standard deduction. Partly blind means that the person is able to see no better than 20/200 in the better eye with corrective lenses, or the person has a field of vision not more than 20 degrees.
3 factors needed to determine the filing requirements for a nondependent
Age, filing status, and gross income
Following items needed to determine standard deduction for dependent
Age, blindness, earned income, and filing status
