The income requirements for filing taxes are quite low. If filing single, you need to file a federal return if you earned more than $10,300 in 2015. The amount doubles for a married couple. If you earned more than $8,000, you need to file a state return. Filing a return is necessary if you expect a refund of taxes withheld by an employer or through the Earned Income Tax Credit.
When you think about it, the tax system here in the United States is really based on the honor system. The federal government trusts that you will honor your responsibility to file your tax forms to the Internal Revenue Service for processing. Of course, you truly are legally required to file them -- but even if you didn't file, some time would pass before any penalties would be inflicted upon you.
If you didn't file your taxes last year, or in some other previous year, you may be feeling immobilized by indecision about what to do. That's a natural human tendency, but there are several good reasons to address the situation now.
You open your mailbox and find a notice from the IRS called CP-2000. Looking it over, it appears to be about underreporting of income. If you are like most people, you will probably have many questions.
Let's resume our discussion of the complexities of employment taxes for people involved in the social-sharing economy.
The rapid increase in consumer transactions delivered through social-sharing services has many far-reaching implications. Ride-sharing services such as Uber and Lyft, for example, have begun to upend the business model for the taxi industry in Boston and other cities around the country.
For years, the IRS has had a whistleblower program under which individuals who provide information to the government that leads to the collection of unpaid taxes are eligible to apply for financial awards.
The Foreign Account Tax Compliance Act (FATCA) is a serious headache for Americans living abroad. Indeed, that is probably an understatement. If FATCA is a headache, it is perhaps best characterized as a migraine, carrying significant compliance pain.
"Don't look back," famous Americans from Satchel Paige to Bob Dylan have counseled. Neither of those two men, however, worked for the IRS.
For taxpayers without foreign bank accounts, filing season comes only once a year, in April. But if you have reporting obligations for a non-U.S. account, there is a second filing deadline that comes at the end of June. The applicable form for this second filing is now called FinCEN 114, though it is still widely known as the FBAR.