Federal Tax Filing: Intro

Answer the following questions:  What is my age?  What is my marital status?  What is my gross income? Do I need to file a tax return?

The IRS determines age based on your age the last day of the year. Age

 Question: Jack turned 18 on December 31, When he files his taxes for 2015, what is his age?  Answer: 18 Age

The IRS determines marital status on the last day of the tax year. Marital Status

 Question: Jack and Jill were married on December 31, Are they single or married for tax purposes during 2015?  Answer: Married Marital Status

 Question: Mike and Molly were divorced on December 31, Are they single or married for tax purposes during 2015?  Answer: Unmarried Marital Status

You must file a tax return if your gross income equals or exceeds the sum of the taxpayer’s standard deduction and personal exemption amount. Gross Income

 The standard deduction is the base amount of income not subject to federal taxes. It varies based on your marital and filing status.  Standard deductions ensure that all taxpayers have at least some income that is not subject to federal income tax. Standard Deduction

Marital Status2015 Amount Single or Married (filing separately) $6,300 Married (filing jointly)$12,600

Question: Jack is single. How much is standard deduction? Answer: $6,200 Standard Deduction Marital Status2015 Amount Single or Married (filing separately) $6,300 Married (filing jointly)$12,600

A personal exemption is a fixed amount subtracted from your gross income based on your dependency status. Dependency Status 2015 Amount DependentN/A* Nondependent$4,000 *You may not claim a personal exemption if someone else can claim you as a dependent. Personal Exemption

One of your parents may claim you as a dependent if the answer is YES for all of these questions:  Are they related to you? The child can be your son, daughter, stepchild, eligible foster child, adopted child, etc.  Do they meet the age requirement? Your child must be under age 19 or, if a full-time student, under age 24. There is no age limit if your child is permanently and totally disabled.  Do they live with you? Your child must live with you for more than half the year, but several exceptions apply (including living away at college)  Do you financially support them? Your child may have a job, but that job cannot provide more than half of their support.  Are you the only person claiming them? This requirement commonly applies to children of divorced parents. Here you must use the “tie breaker rules,” which are found in IRS Publication 501. Publication 501 Dependency Status

 Question: Jill is 17 years old. She is a full-time student at WSHS. She lives at home. She has a part-time job and earned $4000 this year. Can her parents claim her as a dependent?  Answer: Yes! (She is under age 19.) Dependency Status

 Question: Jill is 19 years old. She is a full-time student at Virginia Tech. She lives on campus. She has a part-time job and earned $4000 this year. Can her parents claim her as a dependent?  Answer: Yes! (She is a full-time student under age 24.) Dependency Status

 Question: Jill is 19 years old. She works full-time and earned $24,000 this year. She lives with her parents. Can her parents claim her as a dependent?  Answer: No! (She is 19 years old and not a full-time student.) Dependency Status

Question: Is your gross income ≥ standard deduction + personal exemption ? Do you need to file?

Answer: Yes! (Jack’s gross income is more than his standard deduction.) $7,000 ≥ $6,300 Do you need to file?

Answer: No! (Jack’s gross income is less than his standard deduction and personal exemption. $7,000 ≤ $10,300 ($6,300 + $4,000) Do you need to file?