The IRS is not available to answer questions so I wondered if anyone in this group has incurred this problem. I was researching the rules and ended up confused. If someone's only income is a Disability check which is untaxable according to their worksheet and one has no other taxable income, do they still have to file a tax report? Especially if the person is single and the SSDI check is under $25,000.00 a year? The IRS rules seem to state that being under $25,000.00 with no other taxable income makes the SSDI untaxable but they don't make it clear if the person still has to fill with nothing to report??? Thanks for any information anyone can share.
Answers
Long Answer: If you haven't had money taken out by the IRS (thus don't have a refund coming to you) and you don't qualify (or wish to forgo) any refundable tax credits (such as the Earned Income Credit) and your taxable income does not equal or exceed $14,050 (filing single) then you don't have to file.
The IRS has a calculator to help you determine if you need to file
https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return
It'll ask you a long series of questions, estimated time to complete is 12 minutes.
under 65 and single: 12,400
65 and over and single: 14,050
If that fails, you can always ask Wesley Snipes if you need to file taxes or not...
But according to the IRS, the filing requirement is dependent on "gross income" and the IRS does not seem to agree with GreenDream's interpretation of the Internal Revenue Code nor his definition of "taxable income".
Take at a look at Form 1040 for 2020 at https://www.irs.gov/pub/irs-pdf/f1040.pdf
Line 9 is total income.
Line 10 is adjustments to income.
Line 11 is adjusted gross income (line 9 minus line 10c)
Line 12 is the standard deduction or itemized deduction amount
Line 13 is the qualified business income deduction.
Line 14 is the total of lines 12 and 13.
Line 15 is taxable income: Adjusted gross income minus the standard or itemized deduction amount, minus the qualified business income deduction.
But that's just the opinion of the Internal Revenue Service. Taxpayers are free to use other interpretations and definitions, at their risk.
"Gross income means all income you received in the form of money, goods, property, and services that isn't exempt from tax,"
income that isn't exempt from taxes = taxable income
Yet according to IRS Form 1040, taxable income is determined after (among other deductions) taking the standard or itemized deductions. That's a deduction from adjusted gross income (AGI). And AGI is itself a deduction from gross income.
While you don't want opinions I'm going to give you mine anyway: In my opinion, you need to get over yourself. when some one asks a question they neither need nor want your puffery about opinions. You have an answer and/or other relevant information to give then give them the answer and/or relevant information. You have a problem with a specific answer someone else gave, by all means engage them civilly on it. Leave your high opinion of your own answers/low opinion of everyone else's answers out of it.
check.
If my W-2 is blank because you are exempt from tax do I have to send it to the IRS?
Yes, you must report all income regardless of exemptions or credits.
— Josh Rivera
Let's use taxpayer Jane Smith's 2020 Form 1040 as an example. Ms. Smith files a single return, is under age 65 and is not blind. Her entire income in 2020 consisted of taxable interest of $20,000. She has no adjustments to income and no itemized deductions. Form 1040 is at https://www.irs.gov/pub/irs-pdf/f1040.pdf
1. On line 2b, she enters her interest -- 20,000
2. On line 9, she enters her total income -- 20,000
3. On line 10c, she enters her total adjustments to income -- 0
4. On line 11, she enters her adjusted gross income -- 20,000
5. On line 12, she enters her standard deduction amount -- 12,400 -- see https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2020
5. On line 14, she again enters her standard deduction amount -- 12,400
6. On line 15 she enters her taxable income, by subtracting line 14 (12,400) from line 11 (20,000), resulting in a taxable income of $7600.
Now if taxable income determines whether someone is required to file an income tax return, Jane Smith's taxable income is below the filing threshold of $12,400. But, in the opinion of the Internal Revenue Service, it's "gross income", not taxable income, that is determinative. See p. 9 of PDF at https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
And, according to the IRS, her gross income is over $12,400.
But Ms. Smith can certainly choose to refrain from filing a return, based on the interpretation that taxable income is what matters. That's her business.
In the future, I will try to control myself from posting my questions on here and find my answers elsewheres. BTW, I know the difference between gross and taxable income. In fact, inspite of how you got it, you did help me figure out for myself what the answer is so I thank you for that.
paoli2- your postings on this thread have consistently demonstrated that you recognize the difference. Earlier today (though it's further down in the comments) I had posted a response to you, quoting IRS language re the relationship between social security income, gross income, and tax filing requirements. Again, my apologies for any confusion re the above comment.
https://www.thestreet.com/
How Much Do You Have to Make to File Taxes?
Not sure if you have to file a tax return this year? Here's everything you need to know.
Steve FiorilloUpdated:Nov 17, 2020
under 65 and single: 12,400
65 and over and single: 14,050
see Chart A on Page 9 of https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
For a single person under age 65, a return is to be filed if "gross income" (a technical term) is at least $12,400. For a single person, age 65 or older, a return is to be filed if "gross income" is at least $14,050.
What is "gross income"?
"Gross income means all income you received in the form of money, goods, property, and services that isn't exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Don’t include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time in 2020, or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the instructions for lines 6a and 6b to figure the taxable part of social security benefits you must include in gross income."
(emphasis added)
see footnotes to Chart A at p.9 of PDF of 2020 Instruction 1040 at
https://www.irs.gov/pub/irs-pdf/i1040gi.pdf