Do you need to file a US Personal Tax Return in 2019?

January 28th saw the entry of another tax season. Several million returns have already been processed, however many are still confused as to whether they are obligated to file a tax return or not.

 This article focuses on US citizens residing within the USA. Please note that there are different regulations for US expats. Feel free to contact us for details on filing a tax return as a US expat.  

For those completely new to filing their personal tax return, the 2019 tax return covers income and corresponding deductions dating between the January 1st, 2018 and December 31st 2018. There are a number of reasons why you may have  to report your income to the IRS through a tax return. If you surpass the threshold set out by the IRS for gross income, in accordance with your age and filing status, then you will be required to file a personal tax return. Below is a chart showing Filing status, Age, Gross Income thresholds for 2019.

{Put together using figures  www.IRS.gov  )

{Put together using figures www.IRS.gov )

When determining your income- as well as a partners- you much consider all income you received that isn’t exempt from tax i.e.

·      Income from sources outside the United States

·      Income from the sale of your main home even if you can exclude part of it from tax

·      Gains on form 8949 or schedule D

·      Business income reported on schedule C, line 7 or Schedule F, line 9

 

The chart shown above is not applicable if someone is claiming you on their Federal income tax return. Below we have summarised details for those who are claimed as dependents on another person tax return:

Single Dependent	Under 65 AND Not Blind	Required to file a personal tax return if unearned income (i.e. dividends) reached more than $1,050 or if income was more than $12,000  Single Dependent	Over 65 OR Blind	Required to file a personal tax return if unearned income (i.e. dividends) reached more than $2,650 or if income was more than $13,600  Single Dependent	Over 65 AND Blind	Required to file a tax return if unearned income is over $4,250 or if earned income is over $15,200 Married Dependent	When either is 65 AND Blind	Required to file a personal tax return if unearned income is more than $3,650, earned income is over $14,600

There are a number of reasons why you may be required to file, even if not expressed on the chart above.  For instance:

Self-Employed

Generally speaking, if you are self-employed you are will have to file a personal tax return.  If your net earnings from self-employment are $400 or more you must file a personal tax return to the IRS.

As an accountant for creative industry professionals, such as actors and photographers, we are expert in filing self-employed creative professionals tax returns and saving them money against tax while doing so.

Special Taxes

If you pay special taxes such as recapture tax you will be required to file a personal tax return to the IRS.

IRA or MSA contributions

If you have made excess contributions to an IRA or MSA during the tax year you will be required to file a personal tax return

Required Minimum Distributions 

If you did not take required minimum distributions (RMD) you will be required to file a personal tax return.

There are a number of other circumstances that may lead you to have to file a tax return. Please reach out to us if you have any queries or require any support on filing your taxes.