Individual income tax is imposed on the worldwide-sourced income of U.S. citizens or residents, and on the domestic-sourced income of U.S. non-residents. According to the IRS, not everyone is obligated to file a tax return, such as in situations below the standard deduction. The following article will provide a brief overview of who is required to file a U.S. individual income tax return.
General rule and deduction
Depending on the situation, a tax return must be filed when the income is equal to or greater than the following criteria.
(1) Single or married filing separately must file when income equal to or greater than $12,950. Available additional deductions can be increased by $1,750.
(2) Head of Household must file when income equal to or greater than $19,400. Available addition deductions can be increased by $1,750.
(3) Married filing jointly and surviving spouses must file when income equal to or greater than $25,900. Available additional deductions can be increased by $1,400.
The above figures are adjusted annually for inflation. Additional deductions are available for taxpayers who are blind and 65 years of age or older.
The following exceptions also require filing a tax return
(1) Individuals with net income of $400 or more from self-employment must file.
(2) Taxpayers who are married and have another dependent with unearned income of more than $1,150.
(3) Individuals with income or tax liability under Section 965.
(4) Individuals who received money from medical savings account during the year.
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Individual income tax is imposed on the worldwide-sourced income of U.S. citizens or residents, and on the domestic-sourced income of U.S. non-residents. According to the IRS, not everyone is obligated to file a tax return, such as in situations below the standard deduction. The following article will provide a brief overview of who is required to file a U.S. individual income tax return.
An individual retirement account (IRA) is a tax-advantaged investing tool that allows individuals to save money for retirement. The following will discuss the two basic types of IRA: Traditional IRA and Roth IRA.Contributions you make to a Traditional IRA may be fully or partially deductible, depending on your circumstances, and generally amounts in your traditional IRA (including earnings and gains) are not taxed until distributed.
we should figure out some basic concepts. A capital asset includes inherited property or property someone owns for personal use (e.g. cars and home) or as an investment (e.g. stocks and bonds). A capital gain or loss is the difference between the basis and the amount the seller gets when they sell an asset. The basis is usually what the seller paid for the asset.
The standard deduction amount varies depending on your income, age, whether or not you are blind, and filing status and changes each year. For 2020, the standard deduction for married filing jointly is $24,800. For single taxpayers and married individuals filing separately, the standard deduction is $12,400, and for heads of households, the standard deduction will be $18,650 for tax year 2020.
