However the choice is usually not an option.
If you are a U.S. citizen you must file a return if your gross income for the year was at least the combined amount of your filing status standard deduction and your filing status personal exemption(s); for a married couple under 65 that figure would be $20,700 and for a single taxpayer under 65, $10,350.00. Self-employed individuals have to file a tax return if their net earnings from self-employment exceed $400. Other rules apply when it comes to income earned or unearned regarding dependent children.
Generally, income is taxable unless it is specifically exempt (not taxed) by law. Your taxable income may include compensation for services, interest, dividends, rents, royalties, income from partnerships, estate or trust income, gain from sales or exchanges of property, and business income of all kinds. Gross income is all income you receive in the form of money, goods, property, and services (that isn’t exempt from tax).
A majority of taxpayers have taxes withheld from wages and/or distributions, so even if they are below the filing thresholds, it may still behoove them to file a tax return in order to obtain a refund of over-withholding. If it is clear to the IRS from filed “Information Returns” that you have a filing requirement, and actually filing the tax return would yield a tax refund, you most likely will never hear from the IRS about the unfiled return. Bear in mind, if you go 3-years beyond the tax return due date any refund owed is lost.
Conversely, if it is clear to the IRS from filed “Information Returns” that you have a filing requirement, the service will always assume there is tax there to be collected and send a letter inquiring about the missing return.
An information return is a tax document that certain persons, corporation, partnership, individual, estate, trust or LLC are required to file with the Internal Revenue Service to report certain business transactions. An information return is not an income tax return; it is used for reporting purposes only. Information on the return is used both to assist taxpayers in preparing their return and to allow the IRS to match the information from the specified transaction to the taxpayer’s tax return.
For many taxpayers, the IRS could simply prepare a tax return based on information provided by others on Information Returns; in fact, when the IRS does this, they create a Substitute for Return (SFR) upon which they assess tax and proceed with collection.
There are times when the taxpayer actually has a choice whether or not to file a tax return; most of the time there is no choice. If you have questions about whether you exceed filing thresholds, call us for help. Contact the Florida offices of the www.taxproblemsolver.com today to speak with an IRS Enrolled Agent (EA), tax resolution attorney or CPA. Call 407-629-5923 or 727-894-2099. Or email us at email@example.com. We help taxpayers NATIONWIDE and are here to provide quality assistance to your most important tax issues.