WHO MUST FILE A 2017 TAX RETURN?

Do you have to file a 2017 tax return?  Let’s review.

Generally, you do not have to file a federal 2017 Form 1040, or 1040A, unless your “gross income” is at least -

Single = 10,400

Single, Age 65 or Older = 11,950 

Head of Household (with one dependent) = 17,450

Married Couple = 20,800

Family of 4 = 28,900

Married Couple, One Spouse 65 or Older = 22,050

Married Couple, Both 65 or Older = 23,300

“Gross income” means –

“All income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Do not include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time in 2014 or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly).” 

Gross income includes gains, but not losses, reported on Form 8949 or Schedule D.  If you are a sole proprietor filing a Schedule C, gross income is the amount reported on Line 7 of Part 1 – gross receipts less returns and allowances and cost of goods sold plus “other income”.  And if you are a landlord gross income includes the gross rents reported on Schedule E.

So, you see that the filing requirements are not based on actual "net" taxable income.  For any type of business income or capital gains the income before deducting any expenses or deducting the cost basis of investments sold is counted.  You must file a return to identify the expenses and cost basis.

You must file a tax return for a dependent if any of the following applies –

*  unearned income is more than $1,050

* earned income is more than $6,350, or

* gross income is more than the greater of $1,050 or the sum of $350 and the individual's earned income (total not more than $6,350).

Regardless of your gross income, you generally must file an income tax return if -

* you had net self-employment income of $400 or more,

* you owe household employment taxes,

* you owe additional taxes on premature retirement plan distributions

* you failed to take a required minimum distribution from a retirement plan,

* you must repay the 2008 Homebuyer Credit,

* you owe Social Security and Medicare taxes on unreported tip income, or

* you received an advance payment on the Premium Tax Credit.

And, whether or not you are required to do so, you should file a tax return to get a refund of tax withheld or to take advantage of a refundable tax credit like the Earned Income Credit or the Additional Child Tax Credit.

Another reason to file a tax return, even if you are not legally required to do so, is to start the clock running on the normally 3-year statute of limitations for IRS audit or review of a return. 

The numbers for individual state income tax returns differ.  You may not have to file a federal return, but you must, or should, file a state return.  For example, the State of Pennsylvania is a gross income tax with no personal exemptions or standard, or itemized, deductions.  You must file a PA-40 and pay the 3.07% flat state income tax if “you received total PA gross taxable income in excess of $33”. 

Any questions?  Ask your, or a, tax professional.  To find a qualified tax professional in your area go to FIND A TAX PROFESSIONAL.  Whatever you do, do not email me.  I am no longer accepting any new clients.  

Want to know “What’s New In Taxes for 2017”?  Click here.  

TTFN