1. FILING BASICS: Who Must File?

2. Taxpayer Information Individuals who are citizens or residents of the United States, or residents of Puerto Rico, and who meet certain filing requirements, must file a federal income tax return. To determine whether someone must file a tax return, you need to know the individual's: Age Gross Income Filing Status

3. Charts The Three Charts to determine whether a taxpayer is legally required to file a return: Chart A - For Most People Who Must File is for individuals who cannot be claimed as a dependent on another taxpayer's return. Chart B - For Children and Other Dependents is for single and married dependents. Chart C - Other Situations When You Must File should be reviewed for all individuals as a last step after using the other charts. Charts A, B, and C are found in Publication 4012 (VITA/TCE Volunteer Resource Guide).

4. Problems Lucy, is 36 years old, single and her income is $20,000. Henrietta and Javier are married and plan to file a joint return. Henrietta is 67 and had a gross income of $11,000 for the tax year. Javier is 66. His gross income was 5,000 for the year.

5. Additional Info Whether they owe taxes or not, individuals must file a return whenever a chart or checklist shows they must file. For a minor who is unable to file, the child's parent or guardian must complete and sign a return for the child.

6. Who Should File Although some individuals may not be required to file, they should file a return to claim: A refund of withheld taxes The earned income credit The additional child tax credit Taxpayers who should file may be entitled to a tax credit and filing a return is the only way to get it.

7. Dependents who Must or Should File a Return A married dependent with at least $5 of income whose spouse itemizes deductions on a separate return on Form 1040. A dependent with at least $400 of net self-employment income must file a return. (Self-employment income is earned income from a trade, business, farming or profession that is not paid by an employer. For example, seamstresses and lawn care workers who work for themselves (and not for someone else) are considered self-employed. A dependent who is not required to file but had income tax withheld should file a return to get a refund. A dependent who has to pay a tax such as tax on tips. For more information, see chapter 1 of Publication 17, Your Federal Income Tax.

8. Problems Which of the following individuals could use Chart A to determine if they must file a tax return? A. Mrs. Harlan, 68, who is widowed and supported by her son B. Mrs. Fulton, 70, who is legally blind and whose only sources of income are her pension and investments C. Mr. Emmet, 34, a stay-at-home dad whose only income was $6,000 in self-employment

9. Problems True or False? Bob is 27 years old. No one can claim him as a dependent. His gross income was $9,550 during the tax year. Based only on this information, Bob is required to file a tax return True or False? Janet and Harry are married and usually file jointly. During the tax year, Janet turned 66 and Harry turned 64. Their gross income was $16,200. Based only on this information, they are required to file a tax return.

10. Problems True or False? Juanita can file as a Qualifying Widow with Dependent Child. She is 47 years old. Her gross income was $15,400. Based only on this information, she is required to file a tax return. Trudy is a single 22-year-old full-time college student and is claimed as a dependent on her mother's tax return. Last year Trudy grossed $6,100 from her part-time job as an administrative assistant. Is Trudy required to file a return?

11. Exercises Larry and Zelda are married but will not file a joint return. Both are under 65 and not blind. Larry's gross income from wages is $30,150 and Zelda's is $4,000. Which of the following is true? a. Just Larry is required to file b. Just Zelda is required to file c. Both Larry and Zelda are required to file d. Neither Larry nor Zelda must file

12. Exercises Trudy, 66, qualifies for Head of Household filing status and had $10,900 in gross income. Is she required to file a return? Yes No Depends on her net income

13. Identity Verification IRS regulations require that each person listed on a U.S. federal income tax return have a valid Taxpayer Identification Number: Social Security Number (SSN) Individual Taxpayer Identification Number (ITIN) Adoption Taxpayer Identification Number (ATIN) Verify the accuracy of the social security number and the spelling of the individual's name by ensuring that the information on the tax return matches the social security card. Taxpayer, spouse, and dependent name and social security number mismatch is rated as one of the top five errors in processing a tax return.

14. ITIN The IRS issues an Individual Taxpayer Identification Number (ITIN) to nonresident or resident aliens who are required to have a U.S. Taxpayer Identification Number (TIN) but who do not have, and are not eligible to obtain, a Social Security Number (SSN). An ITIN is a tax processing number consisting of nine digits. The first number begins with a 9 and the fourth and fifth numbers range from 70-88. The ITIN is formatted like a SSN (XXX-XX-XXXX).

15. ITIN The ITIN is for tax purposes only. The issuance of an ITIN does not: Entitle the recipient to social security benefits or the Earned Income Credit (EIC) Create a presumption regarding the individual's immigration status Give the individual the right to work in the United States Taxpayers who cannot obtain an SSN must apply for an ITIN if they file a U.S. tax return or are listed on a tax return as a spouse or dependent. These taxpayers must file Form W-7, Application for Individual Taxpayer Identification Number, and supply documentation that will establish foreign status and true identity.

16. Adoption Taxpayer Identification Number Taxpayers who are in the process of adopting a child and who are able to claim the child as their dependent, or are able to claim a childcare credit, need an Adoption Taxpayer Identification Number (ATIN) for their adoptive child. The IRS issues an ATIN for the child while a final domestic adoption is pending and the adopting taxpayers do not have the child's SSN. Like an ITIN, the nine-digit ATIN begins with the number 9. Enter the ATIN on the return wherever the child’s social security number is requested.

17. No SSN Card If an individual does not have a social security card, you may accept either one of the following documents: SSA 1099 benefit statements SSA letter Driver's licenses or passports are not acceptable because they might not display names as they appear on SSA records, and because they do not contain social security numbers.

18. Incorrect SSN and ITIN If the taxpayer's Form W-2 does not have the correct SSN, the taxpayer will need to request a corrected Form W-2 from the employer before submitting the tax return. Taxpayers who file tax returns using ITINs (and other taxpayers who do not have valid SSNs) often attach Forms W-2 showing erroneous SSNs. If such an ITIN/SSN mismatch occurs: Do not change any information on the Form W-2 It is OK to e-file a return with an ITIN/SSN mismatch (effective since 2006) The return should reflect the ITIN for the taxpayer, not the SSN on Form W-2 When inputting the Form W-2(s), the mismatched SSN should be entered exactly as shown on the Form W-2 issued by the employer The taxpayer is not eligible for the Earned Income Credit (EIC)