• by admin
• March 2, 2023

Do You Need to File a U.S. Tax Return? Understanding Income Thresholds and Filing Requirements

 

In the United States, individuals must file a federal income tax return with the Internal Revenue Service (IRS) if their income meets certain thresholds. The filing requirements can change from year to year, so it’s important to check the current rules with the IRS.

For tax year 2022, individuals must file a federal tax return if their gross income was at least:

• Single filers, who is under the age of 65: $12,950
• Single filers, who is at the age of 65 or older: $14,700
• Married filing jointly where both the spouse under the age of 65: $25,900
• Married filing jointly where only spouse is under the age of 65: $27,300
• Married filing jointly where both the spouse at the age of 65 or older: $28,700
• Head of household if under the age of 65: $19,400
• Head of household if at the age of 65 or older: $21,150
• Married filing separately: $5
• Widow(er) with dependent child if under the age 65: $25,900
• Widow(er) with dependent child if at the age 65 or older: $27,300

Note that there are some other situations where an individual may be required to file a tax return even if their income is below these thresholds, such as if they owe certain taxes (such as the Alternative Minimum Tax) or if they received certain types of income (such as tips or self-employment income).

It’s also worth noting that some states have their own income tax filing requirements, which may differ from the federal rules.

 

U.S. Citizen living abroad

US citizens who live abroad are generally still required to file a federal income tax return with the Internal Revenue Service (IRS) if their income meets above thresholds. The rules for filing a tax return are generally the same for US citizens living abroad as they are for US citizens living in the United States.

However, there are some special rules that apply to US citizens living abroad. For example:

1. The deadline for filing a tax return is usually June 15th instead of April 15th, although any taxes owed are still due by April 15th.
2. US citizens living abroad may be eligible for certain exclusions and deductions, such as the foreign earned income exclusion and the foreign housing deduction. These can help to reduce or eliminate their US tax liability.
3. US citizens living abroad may also be required to file additional forms, such as the Report of Foreign Bank and Financial Accounts (FBAR) or the Foreign Account Tax Compliance Act (FATCA) form.

It’s important to note that even if a US citizen living abroad doesn’t meet the income thresholds for filing a tax return, they may still be required to file if they have certain types of income, such as self-employment income, or if they have certain foreign financial accounts or assets. It’s always best to consult with a tax professional or the IRS to determine your specific tax filing requirements.

 

Benefits of filing a tax return even though your income is below the above threshold

• Have had federal income tax withheld from their pay.
• Made estimated tax payments.
• Qualify to claim refundable tax credits.

Some important tax credits that you may be entitled to:

1. Earned Income Tax Credit
2. Child Tax Credit
3. Credit for Other dependents
4. Education Credits

 

RKB Accounting has expertise in cross-border taxation and has been providing accounting and taxation services for the last fifteen years in Canada and USA. RKB services include incorporating a business on both sides of the border, bookkeeping, sales tax, payroll, and corporate and personal income tax. RKB’s expertise includes cross-border tax planning, long-term tax planning, helping business start-ups, business structure planning, and resolving complex tax matters.

Disclaimer: Information in the blog/post/article has been presented for a broad and simple understanding. This is not legal advice. RKB Accounting & Tax Services does not accept any liability for its application in any real situations. You need to contact your accountant or us for further information.

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