There are some instances when you may not be required to file a federal income tax return. But keep this in mind — more than 70 percent of those who file are due a refund, so it may be to your advantage to file even if you are not required to!
The law does require you to file a tax return if your income is above a certain level. Check the instructions for Form 1040 (http://www.irs.gov/pub/irs-pdf/i1040gi.pdf) for specific details that may affect your need to file a tax return with IRS this year.
Here are some general guidelines for anyone under age 65. Remember, these guidelines may change based on your particular situation. In general, once you have the following gross income amounts, the law requires you to file a federal tax return with the IRS:
· Single, under 65, and your gross income was at least $7,950.
· Single, 65 or older, and your gross income was at least $9,150.
· Married, filing a joint return, you and your spouse were both under 65, and your gross income was at least $15,900.
· Married, filing a joint return, one spouse is 65 or older, and your gross income was at least $16,850.
· Married, filing a joint return, both you and your spouse were 65 or older, and your gross income was at least $17,800.
· Married, filing a separate return, and your gross income was at least $3,100, regardless of your age.
· Head of household, under 65, and your gross income was at least $10,250.
· Head of household, 65 or older, and your gross income was at least $11,450.
· Qualifying widow or widower with a dependent child, you were under 65, and your gross income was at least $12,800.
· Qualifying widow or widower with a dependent child, you were 65 or older, and your gross income was at least $13,750.
Gross income includes all income you receive in the form of money, goods, property, and services that is not exempt from tax. Even though your gross income was less than the amount stated for your age and filing status, you may have to file a tax return.
You must file a tax return if you had net earnings from self–employment of $400 or more. Net earnings from self–employment is your total self–employment income less the expenses paid in operating your trade or business, multiplied by 92.35%. For more details, refer to Publication 533, Self–Employment Tax.
If you are an individual who may be claimed as a dependent on another person's return, you are subject to specific filing requirements. Refer to the instructions in your tax package or refer to Publication 929, Tax Rules for Children and Dependents, or Publication 501, Exemptions, Standard Deduction, and Filing Information, for the filing requirements for dependents.
You must file a tax return if you received any amount of advance earned income credit payments from your employer during the year, or if you owe any taxes, such as social security tax and Medicare tax on tips or group life insurance, alternative minimum tax, tax on qualified retirement plans including an Individual Retirement Account, or other tax-favored account, or tax from recapture of an education credit, investment credit, low income housing credit, federal mortgage subsidy, qualified electric vehicle credit, or the native American employment credit.
Special filing requirements may apply to U.S. citizens who are residents of Puerto Rico or who have income from U.S. possessions. Order Publication 570 for additional information. Residents of Puerto Rico should select Topic 901.
Generally, you must file a tax return if you are a nonresident alien with income from sources in the United States . For more information on nonresident aliens, select Topic 851.
Even if you are not required to file a tax return, you should file a return if you are due a refund.
If you did not file a return for a previous year and you were required to do so, refer to Topic 153. If you need help determining which form to file, refer to Topic 352.
Even individuals who don't earn enough to be required to file a tax return may be eligible for an earned income credit up to $2,604 for a taxpayer with one qualifying child and $4,300 for a taxpayer with two or more qualifying children. Some individuals who do not have a qualifying child may be eligible for a credit of up to $390. However, you must file a return to receive the Earned Income Tax Credit. You must also file a return if you received any advance payments of this credit while you worked during the year.
SPECIAL ASSISTANCE IS AVAILABLE
Special assistance is available for persons with disabilities. If you are unable to complete your return because of a physical disability, you may obtain assistance from an IRS office, or VITA, Volunteer Income Tax Assistance Program sponsored by IRS. For further information on available IRS services, refer to Topic 101 or refer to Publication 910 (PDF), Guide to Free Tax Services.
Telephone assistance for the hearing impaired is available for individuals with TTY equipment. The toll–free number for this service is 1–800–829–4059. Hearing impaired individuals that do not have this equipment may be able to obtain access through the federal or state relay services.
Braille materials for the visually impaired are available at any of the 142 regional libraries in conjunction with the national library service for the blind and physically handicapped. To locate your nearest library write to the National Library Service for the Blind and Physically Handicapped, Library of Congress at 1291 Taylor Street, Northwest , Washington , D.C. 20542 . Available materials are limited to Publication 17, Your Federal Income Tax, Publication 334, Tax Guide for Small Business, and Form 1040 (PDF), Forms 1040A and 1040EZ (materials include instructions and tax tables).
For additional information on these subjects and other areas that may affect persons with disabilities, refer to Publication 907, Tax Highlights for Persons with Disabilities.
OTHER TAX DETAIL
All income is taxable unless it is specifically excluded by law. The following discussions highlight some income items (both taxable and nontaxable) that are of particular interest to people with disabilities and those who care for people with disabilities.
Dependent Care Benefits
You can exclude from income benefits provided under your employer's qualified dependent care assistance plan. You may be able to exclude up to $5,000. The care must be provided for your dependent under the age of 13 or your spouse or dependent who is not able to care for himself or herself.
For information about excluding benefits on Form 1040, see Form 2441, Child and Dependent Care Expenses, and its instructions. For information about excluding benefits on Form 1040A, see Schedule 2 (Form 1040A), Child and Dependent Care Expenses for Form 1040A Filers.
Social Security and Railroad Retirement Benefits
If you received social security or equivalent tier 1 railroad retirement benefits during the year, part of the amount you received may be taxable.
Are any of your benefits taxable? If the only income you received during the year was your social security or equivalent tier 1 railroad retirement benefits, your benefits generally are not taxable and you probably do not have to file a return.
If you received income during the year in addition to social security or equivalent tier 1 railroad retirement benefits, part of your benefits may be taxable if all of your other income, including tax-exempt interest, plus half of your benefits are more than:
- $25,000 if you are single, head of household, or qualifying widow(er),
- $25,000 if you are married filing separately and lived apart from your spouse for all of the year,
- $32,000 if you are married filing jointly, or
- $-0- if you are married filing separately and lived with your spouse at any time during the year.
For more information, see the instructions for Form 1040, lines 20a and 20b or Form 1040A, lines 14a and 14b. Publication 915, Social Security and Equivalent Railroad Retirement Benefits, contains more detailed information.
Supplemental security income (SSI) payments. Social security benefits do not include SSI payments, which are not taxable. Do not include these payments in your income.
Generally, you must report as income any amount you receive for your disability through an accident or health insurance plan that is paid for by your employer. If both you and your employer pay for the plan, report as income only the amount you receive for your disability that is due to your employer's payments. Your employer should be able to give you specific details about your pension plan and tell you the amount you paid for your disability pension.
If you paid the entire cost of the plan, do not report as income any amounts you get from the plan for your disability. See Publication 525, Taxable and Nontaxable Income, for more information.
Military and Government Disability Pensions
Generally, you must report disability pensions as income, but do not include certain military and government disability pensions. For information about military and government disability pensions, see Publication 525.
VA disability benefits. Do not include disability benefits you receive from the Department of Veterans Affairs (VA) in your gross income. If you are a military retiree and do not receive your disability benefits from the VA, see Publication 525 for more information.
Do not include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the VA. These include:
- Education, training, or subsistence allowances,
- Disability compensation and pension payments for disabilities paid either to veterans or their families,
- Grants for homes designed for wheelchair living,
- Grants for motor vehicles for veterans who lost their sight or the use of their limbs,
- Veterans' insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran's endowment policy paid before death, or
- Interest on insurance dividends left on deposit with the VA.
Rehabilitative program payments. VA payments to hospital patients and resident veterans for their services under the VA's therapeutic or rehabilitative programs are included as income other than wages. These payments are reported on Form 1040, line 21.
You may receive other payments that are related to your disability. The following payments are not taxable.
- Benefit payments from a public welfare fund, such as payments due to blindness.
- Workers' compensation for an occupational sickness or injury if paid under a workers' compensation act or similar law.
- Compensatory (but not punitive) damages, for physical injury or physical sickness.
- Disability benefits under a “ no-fault” car insurance policy for loss of income or earning capacity as a result of injuries.
- Compensation for permanent loss or loss of use of a part or function of your body, or for your permanent disfigurement.
Long-Term Care Insurance
Qualified long-term care insurance contracts generally are treated as accident and health insurance contracts. Amounts you receive from them (other than policyholder dividends or a premium refund) generally are excludable from income as amounts received for personal injury or sickness. More detailed information can be found in Publication 525.
Accelerated Death Benefits
You can exclude from income accelerated death benefits you receive on the life of an insured individual if certain requirements are met. Accelerated death benefits are amounts received under a life insurance contract before the death of the insured. These benefits also include amounts received on the sale or assignment of the contract to a viatical settlement provider. This exclusion applies only if the insured was a terminally ill individual or a chronically ill individual. For more information, see Publication 525.
If you file Form 1040, you generally can either claim the standard deduction or itemize your deductions. You must use Schedule A (Form 1040) to itemize your deductions. See your form instructions for information on the standard deduction and the deductions you can itemize. The following discussions highlight some itemized deductions that are of particular interest to persons with disabilities.
You can deduct medical and dental expenses for you, your spouse, and your dependents.
Medical expenses include payments you make for the diagnosis, cure, mitigation, treatment, or prevention of disease and for treatment affecting any part or function of the body. They also include the cost of transportation for needed medical care and payments for medical insurance.
You can deduct only the part of your medical and dental expenses that is more than 7.5% of your adjusted gross income shown on Form 1040, line 37.
The following list highlights some of the medical expenses you may have for special items and equipment related to a disability. For more detailed information, see Publication 502, Medical and Dental Expenses.
- Artificial limbs, eyeglasses, and hearing aids.
- The part of the cost of Braille books and magazines that is more than the price of regular printed editions.
- Cost and repair of special telephone equipment for hearing-impaired persons.
- Cost of equipment that displays the audio part of television programs as subtitles for hearing-impaired persons.
- Cost and maintenance of a wheelchair or autoette.
- Cost and care of a guide dog or other animal aiding a person with a physical disability.
- A therapist or other person who gives “ patterning” exercises to a mentally retarded child.
- A special school, if the main reason for using the school is its resources for relieving a mental or physical disability. This includes the cost of teaching and the cost of remedial language training to correct a condition caused by a birth defect.
- Premiums for qualified long-term care insurance, up to certain amounts.
- Improvements to a home that do not increase its value if the main purpose is medical care. An example is constructing entrance or exit ramps.
Improvements that do increase a home's value, if the main purpose is medical care, may be partly included as a medical expense. See Publication 502 for more information.
Impairment-Related Work Expenses
If you are an employee and have a physical or mental disability that functionally limits your employment, or a physical or mental impairment that substantially limits one or more of your major life activities, you may be able to claim impairment-related work expenses. These are your allowable business expenses for attendant care at your workplace and other expenses in connection with your workplace that are necessary for you to work.
If you have impairment-related work expenses, complete Form 2106, Employee Business Expenses, or Form 2106-EZ, Unreimbursed Employee Business Expenses, and attach it to your Form 1040.
Publication 529, Miscellaneous Deductions, contains more detailed information.
Generally, employee business expenses are subject to a 2%-of-adjusted-gross-income limit. However, impairment-related work expenses are not subject to the 2% limit.
This discussion highlights three tax credits that may be of interest to people with disabilities and those who care for people with disabilities.
Child and Dependent Care Credit
Generally, if you pay someone to care for either your dependent under age 13 or your spouse or dependent who is not able to care for himself or herself, you may be able to get a credit of up to 35% of your expenses. To qualify, you must pay these expenses so you can work or look for work.
You can claim the credit on Form 1040 or 1040A. You figure the credit on Form 2441 (Form 1040) or Schedule 2 (Form 1040A).
For more information, see the instructions for Form 1040, line 47 or Form 1040A, line 29. Publication 503, Child and Dependent Care Expenses, contains more detailed information.
Credit for the Elderly or the Disabled
You may be able to claim this credit if you are 65 or older or if you are under 65 and you retired on permanent and total disability.
You can claim the credit on Form 1040 or 1040A. You figure the credit on Schedule R (Form 1040) or on Schedule 3 (Form 1040A).
For more information, see the instructions for Form 1040, line 48 or Form 1040A, line 30. Publication 524, Credit for the Elderly or the Disabled, contains more detailed information.
Earned Income Credit
This credit is based on the amount of your earned income. But you can get the credit only if your earned income for 2004 was less than:
- $11,490 ($12,490 for married filing jointly) and you did not have a qualifying child,
- $30,338 ($31,338 for married filing jointly) and you had one qualifying child, or
- $34,458 ($35,458 for married filing jointly) and you had more than one qualifying child.
To figure the credit, use the worksheet in the instructions for Form 1040, 1040A, or 1040EZ. If you have a qualifying child, also complete Schedule EIC, Earned Income Credit, and attach it to your Form 1040 or 1040A. You cannot use Form 1040EZ if you have a qualifying child.
Qualifying child. A qualifying child must be under age 19 at the end of 2004, or a full-time student under age 24 at the end of 2004, or permanently and totally disabled at any time during 2004, regardless of age.
Earned income. If you are retired on disability, benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. However, payments you received from a disability insurance policy that you paid the premiums for are not earned income.
More information. For more information, including all the requirements to claim the credit, see the instructions for Form 1040, line 65a, Form 1040A, line 41a, or Form 1040EZ, line 8a. Publication 596, Earned Income Credit (EIC), contains more detailed information.
Generally, if you pay someone to work in your home, such as a baby sitter or housekeeper, you may be a household employer who has to pay employment taxes.
A person you hire through an agency is not your employee if the agency controls what work is done, and how it is done. This control could include setting the fee, requiring regular reports, and providing rules of conduct and appearance. In this case you do not have to pay employment taxes on the amount you pay. But if you control what work is done and how it is done, the worker is your employee. If a worker is your employee, it does not matter that you hired the worker through an agency or from a list provided by an agency.
To find out if you have to pay employment taxes, see Publication 926, Household Employer's Tax Guide.
Business Tax Incentives
If you own or operate a business, or you are looking for work, you should be aware of three tax incentives for businesses to help persons with disabilities. They are:
- Deduction for costs of removing barriers to the disabled and the elderly —This is a deduction a business can take for making a facility or public transportation vehicle more accessible to and usable by persons who are disabled or elderly. See chapter 8 in Publication 535, Business Expenses.
- Disabled access credit —This is a nonrefundable tax credit for an eligible small business that pays or incurs expenses to provide access to persons with disabilities. The expenses must be to enable the eligible small business to comply with the Americans with Disabilities Act of 1990. See the instructions for Form 8826, Disabled Access Credit, for more information.
- Work opportunity credit —This credit provides businesses with an incentive to hire individuals from targeted groups that have a particularly high unemployment rate or other special employment needs. One targeted group consists of vocational rehabilitation referrals. These are individuals who have a physical or mental disability that results in a substantial handicap to employment. See the instructions for Form 5884, Work Opportunity Credit, for more information. Under current law, an employer cannot claim the credit for the wages of an employee who begins work for the employer after 2005.
How To Get Tax Help
You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help.
Contacting your Taxpayer Advocate. If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate.
The Taxpayer Advocate independently represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review.
To contact your Taxpayer Advocate:
- Call the Taxpayer Advocate toll free at
- Call, write, or fax the Taxpayer Advocate office in your area.
- Call 1-800-829-4059 if you are a
- Visit www.irs.gov/advocate.
For more information, see Publication 1546, The Taxpayer Advocate Service of the IRS—How To Get Help With Unresolved Tax Problems.
Free tax services. To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. It contains a list of free tax publications and an index of tax topics. It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics.
Internet. You can access the IRS website 24 hours a day, 7 days a week, at www.irs.gov to:
- E-file your return. Find out about commercial tax preparation and e-file services available free to eligible taxpayers.
- Check the status of your 2004 refund. Click on Where's My Refund. Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Have your 2004 tax return available because you will need to know your filing status and the exact whole dollar amount of your refund.
- Download forms, instructions, and publications.
- Order IRS products online.
- Research your tax questions online.
- Search publications online by topic or keyword.
- View Internal Revenue Bulletins (IRBs) published in the last few years.
- Figure your withholding allowances using our Form W-4 calculator.
- Sign up to receive local and national tax news by email.
- Get information on starting and operating a small business.
Fax. You can get over 100 of the most requested forms and instructions 24 hours a day, 7 days a week, by fax. Just call 703-368-9694 from the telephone connected to your fax machine. When you call, you will hear instructions on how to use the service. The items you request will be faxed to you.
For help with transmission problems, call 703-487-4608.
Long-distance charges may apply.
Phone. Many services are available by phone.
- Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current-year forms, instructions, and publications and prior-year forms and instructions. You should receive your order within 10 days.
- Asking tax questions. Call the IRS with your tax questions at 1-800-829-1040.
- Solving problems. You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Call your local Taxpayer Assistance Center for an appointment. To find the number, go to
www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service .
- TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications.
- TeleTax topics. Call 1-800-829-4477 and press 2 to listen to pre-recorded messages covering various tax topics.
- Refund information. If you would like to check the status of your 2004 refund, call 1-800-829-4477 and press 1 for automated refund information or call 1-800-829-1954. Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Have your 2004 tax return available because you will need to know your filing status and the exact whole dollar amount of your refund.
Evaluating the quality of our telephone services. To ensure that IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. One method is for a second IRS representative to sometimes listen in on or record telephone calls. Another is to ask some callers to complete a short survey at the end of the call.
Walk-in. Many products and services are available on a walk-in basis.
- Products. You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD-ROM or photocopy from reproducible proofs. Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes.
- Services. You can walk in to your local Taxpayer Assistance Center every business day to ask tax questions or get help with a tax problem. An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. You can set up an appointment by calling your local Center and, at the prompt, leaving amessage requesting Everyday Tax Solutions help. A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. To find the number, go to www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service .
Mail. You can send your order for forms, instructions, and publications to the Distribution Center nearest to you and receive a response within 10 business days after your request is received. Use the address that applies to your part of the country.
- Western part of U.S. :
Western Area Distribution Center
Rancho Cordova, CA 95743-0001
- Central part of U.S. :
Central Area Distribution Center
P.O. Box 8903
Bloomington , IL 61702-8903
- Eastern part of U.S. and foreign addresses:
Eastern Area Distribution Center
P.O. Box 85074
Richmond , VA 23261-5074
CD-ROM for tax products. You can order Publication 1796, IRS Federal Tax Products CD-ROM, and obtain:
- Current-year forms, instructions, and publications.
- Prior-year forms and instructions.
- Frequently requested tax forms that may be filled in electronically, printed out for submission, or saved for recordkeeping.
- Internal Revenue Bulletins.
Buy the CD-ROM from National Technical Information Service (NTIS) at www.irs.gov/cdorders for $22 (no handling fee) or call 1-877-233-6767 toll free to buy the CD-ROM for $22 (plus a $5 handling fee). The first release is available in early January and the final release is available in late February.
CD-ROM for small businesses. Publication 3207, The Small Business Resource Guide, CD-ROM 2004, is a must for every small business owner or any taxpayer about to start a business. This handy, interactive CD contains all the business tax forms, instructions, and publications needed to successfully manage a business. In addition, the CD provides other helpful information, such as how to prepare a business plan, finding financing for your business, and much more. The design of the CD makes finding information easy and quick and incorporates file formats and browsers that can be run on virtually any desktop or laptop computer.
It is available in early April. You can get a free copy by calling 1-800-829-3676 or by visiting www.irs.gov/smallbiz.
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