Who Is Required to File and Where
Reporting and taxable entities. Under United States tax law, there are five primary reporting or taxable entities. They are individuals, corporations, partnerships, estates, and trusts. The taxation of individuals is the topic of this text. In some examples, the taxation of partnerships and corporations is presented to compare and contrast with individual income tax rules and regulations but they and the taxation of estates and trusts are not covered in this text. Income from other entities are also reportable on individual income tax returns.
Who is required to file. There are special rules for the following categories of potential taxpayers:
Individuals in general
DependentsdependentQualifying child or qualifying relative.
Children under age 18
Self-employed persons
Aliens (resident and nonresident)
Go to Publication 17, chapter 1 and read the section: Do I Have to File a Return? Within that section, three tables are presented that discuss filing requirements for most taxpayers, filing requirements for dependents, and other situations.
To summarize, for individuals the three main factors that determine if a return must be filed include gross incomegross incomeIncludes all income unless excluded by tax law., filing statusfiling statusDetermines the tax rate paid by a taxpayer; there are 5 statuses: single; married filing jointly; married filing separately; head of household; and qualifying widow(er) with dependent child., and age. Gross income in 2008 of over $8,950 for single taxpayers, $17,900 for married filing jointly, and $11,500 for head of household required that tax returns be filed. These amounts change for taxpayers over age 65.
Dependents (someone claimed on another’s tax return) with unearned income of over $900 are required to file a tax return. There are several other income amounts that require tax returns, and the table should be referenced.
The most common “other” situations requiring a filed tax return, includes uncollected Social Security or Medicare on tips and other forms of income or benefits, and self-employment income of $400 or more.
Where to file tax returns. If filing a paper income tax return, the returns are mailed to an IRS Service Center. Paper income tax returns with preprinted labels also come with envelopes with the correct address. If an envelope is not available with the correct address, there is a page near the back of Publication 17 that will provide the address and a special zip code depending on the tax form used and whether or not a refund is anticipated.
Questions and Problem
Chris is a 31-year-old single taxpayer. What is the minimum amount of income that she must have to be required to file a tax return for 2008?
$5,450
$8,000
$8,950
$10,900
Some other amount
Which of the following would likely force the taxpayers to file a joint return on a form 1040 rather than file on a 1040A?
All income by both of the taxpayers is from wages.
Taxable income is less than $80,000.
An IRA deduction will be taken.
Itemized deductions total more than the standard deduction.
Five different tax credits will be claimed.
For each of the following situations, indicate whether the taxpayer(s) must file a tax return for 2008. Explain your answer.
Case File? Y/N Why? Explain a. Lars is a single taxpayer with wages of $9,350. b. Laura is a single college student who is claimed as a dependent by her parents. She earned $1,750 from a part-time job and has $1,350 in interest income. c. Lena (age 64) and Leo (age 66) are married and file a joint return. They received $16,300 in interest income from a savings account. d. Linda (age 60) and Mark (age 62) are married and file a joint tax return. They had $15,700 in earnings from wages and $5,000 in “tax free” interest income. e. Lisbeth, a 19-year-old single taxpayer, had net earnings from self-employment of $1,625.
