Filling Information

Chapter 1
Filling Information

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What’s New

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Who must file. Generally, the amount of income you can receive before you must file a return has been increased. See Table 1-1, Table 1-2, and Table 1-3 for the specific amounts.

A Special Note About the Affordable Care Act and Your 2014 Tax Return. When you file your 2014 tax return in 2015, you and your family will have to document that you had health care coverage throughout 2014. Under certain circumstances, you may be entitled to an exemption if you did not maintain coverage in 2014. Otherwise, you may need to make a payment with the 2014 return. For more information on the payment or exemptions, visit www.IRS.gov/aca. If you currently have qualifying health care coverage, you will not need to do anything more than maintain that coverage throughout 2014. If you buy insurance through the Health Insurance Marketplace, you may be eligible for an advance payment of the Premium Tax Credit to help pay for your insurance coverage. If you are receiving an advance payment of the Premium Tax Credit during 2014, you should report changes in your income or family size to your Marketplace. By reporting changes promptly, you can make adjustments that will help you get the correct amount. Receiving too much or too little in advance will affect your refund or balance due when you file your 2014 tax return in 2015. Visit www.IRS.gov/aca for information on the tax provisions of the Affordable Care Act and www.HealthCare.gov for Marketplace information.

Reminders

File online. Rather than filing a return on paper, you may be able to file electronically using IRS e-file. Create your own personal identification number (PIN) and file a completely paperless tax return. For more information, see Does My Return Have To Be on Paper, later.

Change of address. If you change your address, you should notify the IRS. You can use Form 8822 to notify the IRS of the change. See Change of Address, later, under What Happens After I File.

Enter your social security number. You must enter your social security number (SSN) in the spaces provided on your tax return. If you file a joint return, enter the SSNs in the same order as the names.

Direct deposit of refund. Instead of getting a paper check, you may be able to have your refund deposited directly into your account at a bank or other financial institution. See Direct Deposit under Refunds, later. If you choose direct deposit of your refund, you may be able to split the refund among two or three accounts.

Pay online or by phone. If you owe additional tax, you may be able to pay online or by phone. See How To Pay, later.

Installment agreement. If you cannot pay the full amount due with your return, you may ask to make monthly installment payments. See Installment Agreement, later, under Amount You Owe. You may be able to apply online for a payment agreement if you owe federal tax, interest, and penalties.

Automatic 6-month extension. You can get an automatic 6-month extension to file your tax return if, no later than the date your return is due, you file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. See Automatic Extension, later.

Service in combat zone. You are allowed extra time to take care of your tax matters if you are a member of the Armed Forces who served in a combat zone, or if you served in the combat zone in support of the Armed Forces. See Individuals Serving in Combat Zone, later, under When Do I Have To File.

Adoption taxpayer identification number. If a child has been placed in your home for purposes of legal adoption and you will not be able to get a social security number for the child in time to file your return, you may be able to get an adoption taxpayer identification number (ATIN). For more information, see Social Security Number (SSN), later.

Taxpayer identification number for aliens. If you or your dependent is a nonresident or resident alien who does not have and is not eligible to get a social security number, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. For more information, see Social Security Number (SSN), later.

Frivolous tax submissions. The IRS has published a list of positions that are identified as frivolous. The penalty for filing a frivolous tax return is $5,000. Also, the $5,000 penalty will apply to other specified frivolous submissions. For more information, see Civil Penalties, later.

Introduction

This chapter discusses the following topics.

Do I Have To File a Return?

You must file a federal income tax return if you are a citizen or resident of the United States or a resident of Puerto Rico and you meet the filing requirements for any of the following categories that apply to you.

The filing requirements for each category are explained in this chapter.

The filing requirements apply even if you do not owe tax.

Individuals—In General

If you are a U.S. citizen or resident, whether you must file a return depends on three factors:

To find out whether you must file, see Table 1-1, Table 1-2, and Table 1-3. Even if no table shows that you must file, you may need to file to get money back. (See Who Should File, later.)

Gross income. This includes all income you receive in the form of money, goods, property, and services that is not exempt from tax. It also includes income from sources outside the United States or from the sale of your main home (even if you can exclude all or part of it). Include part of your social security benefits if:

If either (1) or (2) applies, see the instructions for Form 1040 or 1040A, or Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure the social security benefits you must include in gross income.

Common types of income are discussed in Part Two of this publication.

Community income. If you are married and your permanent home is in a community property state, half of any income described by state law as community income may be considered yours. This affects your federal taxes, including whether you must file if you do not file a joint return with your spouse. See Publication 555, Community Property, for more information.

Nevada, Washington, and California domestic partners. A registered domestic partner in Nevada, Washington, or California generally must report half the combined community income of the individual and his or her domestic partner. See Publication 555.

Self-employed individuals. If you are self-employed, your gross income includes the amount on line 7 of Schedule C (Form 1040), Profit or Loss From Business; line 1 of Schedule C-EZ (Form 1040), Net Profit From Business; and line 9 of Schedule F (Form 1040), Profit or Loss From Farming. See Self-Employed Persons, later, for more information about your filing requirements.

Filing status. Your filing status depends on whether you are single or married and on your family situation. Your filing status is determined on the last day of your tax year, which is December 31 for most taxpayers. See chapter 2 for an explanation of each filing status.

Age. If you are 65 or older at the end of the year, you generally can have a higher amount of gross income than other taxpayers before you must file. See Table 1-1. You are considered 65 on the day before your 65th birthday. For example, if your 65th birthday is on January 1, 2015, you are considered 65 for 2014.

Surviving Spouses, Executors, Administrators, and Legal Representatives

You must file a final return for a decedent (a person who died) if both of the following are true.

For more information on rules for filing a decedent’s final return, see Publication 559, Survivors, Executors, and Administrators.

U.S. Citizens and Resident Aliens Living Abroad

To determine whether you must file a return, include in your gross income any income you received abroad, including any income you can exclude under the foreign earned income exclusion. For information on special tax rules that may apply to you, see Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. It is available online and at most U.S. embassies and consulates. See How To Get Tax Help in the back of this publication.

Residents of Puerto Rico

If you are a U.S. citizen and also a bona fide resident of Puerto Rico, you generally must file a U.S. income tax return for any year in which you meet the income requirements. This is in addition to any legal requirement you may have to file an income tax return with Puerto Rico.

If you are a bona fide resident of Puerto Rico for the entire year, your U.S. gross income does not include income from sources within Puerto Rico. It does, however, include any income you received for your services as an employee of the United States or a U.S. agency. If you receive income from Puerto Rican sources that is not subject to U.S. tax, you must reduce your standard deduction. As a result, the amount of income you must have before you are required to file a U.S. income tax return is lower than the applicable amount in Table 1-1 or Table 1-2. For more information, see Publication 570, Tax Guide for Individuals With Income From U.S. Possessions.

Individuals With Income From U.S. Possessions

If you had income from Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, or the U.S. Virgin Islands, special rules may apply when determining whether you must file a U.S. federal income tax return. In addition, you may have to file a return with the individual island government. See Publication 570 for more information.

Dependents

If you are a dependent (one who meets the dependency tests in chapter 3), see Table 1-2 to find out whether you must file a return. You also must file if your situation is described in Table 1-3.

Responsibility of parent. Generally, a child is responsible for filing his or her own tax return and for paying any tax on the return. If a dependent child must file an income tax return but cannot file due to age or any other reason, then a parent, guardian, or other legally responsible person must file it for the child. If the child cannot sign the return, the parent or guardian must sign the child’s name followed by the words “By (your signature), parent for minor child.”

Child’s earnings. Amounts a child earns by performing services are included in his or her gross income and not the gross income of the parent. This is true even if under local law the child’s parent has the right to the earnings and may actually have received them. But if the child does not pay the tax due on this income, the parent is liable for the tax.

Certain Children Under Age 19 or Full-Time Students

If a child’s only income is interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends), the child was under age 19 at the end of 2014 or was a full-time student under age 24 at the end of 2014, and certain other conditions are met, a parent can elect to include the child’s income on the parent’s return. If this election is made, the child does not have to file a return. See Parent’s Election To Report Child’s Interest and Dividends in chapter 32.

Self-Employed Persons

You are self-employed if you:

Self-employment can include work in addition to your regular full-time business activities, such as certain part-time work you do at home or in addition to your regular job.

You must file a return if your gross income is at least as much as the filing requirement amount for your filing status and age (shown in Table 1-1). Also, you must file Form 1040 and Schedule SE (Form 1040), Self-Employment Tax, if:

1. Your net earnings from self-employment (excluding church employee income) were $400 or more, or
   
2. You had church employee income of $108.28 or more. (See Table 1-3.)

Use Schedule SE (Form 1040) to figure your self-employment tax. Self-employment tax is comparable to the social security and Medicare tax withheld from an employee’s wages. For more information about this tax, see Publication 334, Tax Guide for Small Business.

Employees of foreign governments or international organizations. If you are a U.S. citizen who works in the United States for an international organization, a foreign government, or a wholly owned instrumentality of a foreign government, and your employer is not required to withhold social security and Medicare taxes from your wages, you must include your earnings from services performed in the United States when figuring your net earnings from self-employment.

Ministers. You must include income from services you performed as a minister when figuring your net earnings from self-employment, unless you have an exemption from self-employment tax. This also applies to Christian Science practitioners and members of a religious order who have not taken a vow of poverty. For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers.

Aliens

Your status as an alien—resident, nonresident, or dual-status—determines whether and how you must file an income tax return.

The rules used to determine your alien status are discussed in Publication 519, U.S. Tax Guide for Aliens.

Resident alien. If you are a resident alien for the entire year, you must file a tax return following the same rules that apply to U.S. citizens. Use the forms discussed in this publication.

Nonresident alien. If you are a nonresident alien, the rules and tax forms that apply to you are different from those that apply to U.S. citizens and resident aliens. See Publication 519 to find out if U.S. income tax laws apply to you and which forms you should file.

Dual-status taxpayer. If you are a resident alien for part of the tax year and a nonresident alien for the rest of the year, you are a dual-status taxpayer. Different rules apply for each part of the year. For information on dual-status taxpayers, see Publication 519.

Who Should File

Even if you do not have to file, you should file a federal income tax return to get money back if any of the following conditions apply.

1. You had federal income tax withheld or made estimated tax payments.
   
2. You qualify for the earned income credit. See chapter 37 for more information.
   
3. You qualify for the additional child tax credit. See chapter 35 for more information.
   
4. You qualify for the health coverage tax credit. See chapter 37 for more information.
   
5. You qualify for the American opportunity credit. See chapter 36 for more information.
   
6. You qualify for the credit for federal tax on fuels. See chapter 37 for more information.

Which Form Should I Use?

You must use one of three forms to file your return: Form 1040EZ, Form 1040A, or Form 1040. (But also see Does My Return Have To Be on Paper, later.)

Form 1040EZ

Form 1040EZ is the simplest form to use.

You can use Form 1040EZ if all of the following apply.

1. Your filing status is single or married filing jointly. If you were a nonresident alien at any time in 2014, your filing status must be married filing jointly.
   
2. You (and your spouse if married filing a joint return) were under age 65 and not blind at the end of 2014. If you were born on January 1, 1950, you are considered to be age 65 at the end of 2014.
   
3. You do not claim any dependents.
   
4. Your taxable income is less than $100,000.
   
5. Your income is only from wages, salaries, tips, unemployment compensation, Alaska Permanent Fund dividends, taxable scholarship and fellowship grants, and taxable interest of $1,500 or less.
   
6. You do not claim any adjustments to income, such as a deduction for IRA contributions or student loan interest.
   
7. You do not claim any credits other than the earned income credit.
   
8. You do not owe any household employment taxes on wages you paid to a household employee.
   
9. If you earned tips, they are included in boxes 5 and 7 of your Form W-2.
   
10. You are not a debtor in a Chapter 11 bankruptcy case filed after October 16, 2005.

You must meet all of these requirements to use Form 1040EZ. If you do not, you must use Form 1040A or Form 1040.

Figuring tax. On Form 1040EZ, you can use only the tax table to figure your income tax. You cannot use Form 1040EZ to report any other tax.

Form 1040A

If you do not qualify to use Form 1040EZ, you may be able to use Form 1040A.

You can use Form 1040A if all of the following apply.

1. Your income is only from:
   
   
   
   1. Wages, salaries, and tips,
      
   2. Interest,
      
   3. Ordinary dividends (including Alaska Permanent Fund dividends),
      
   4. Capital gain distributions,
      
   5. IRA distributions,
      
   6. Pensions and annuities,
      
   7. Unemployment compensation,
      
   8. Taxable social security and railroad retirement benefits, and
      
   9. Taxable scholarship and fellowship grants.
      If you receive a capital gain distribution that includes un-recaptured Section 1250 gain, Section 1202 gain, or collectibles (28%) gain, you cannot use Form 1040A. You must use Form 1040.
   
   
2. Your taxable income is less than $100,000.
   
3. Your adjustments to income are for only the following items.
   
   
   
   1. Educator expenses.
      
   2. IRA deduction.
      
   3. Student loan interest deduction.
      
   4. Tuition and fees.
   
   
4. You do not itemize your deductions.
   
5. You claim only the following tax credits.
   
   
   
   1. The credit for child and dependent care expenses. (See chapter 33.)
      
   2. The credit for the elderly or the disabled. (See chapter 34.)
      
   3. The education credits. (See chapter 36.)
      
   4. The retirement savings contribution credit. (See chapter 37.)
      
   5. The child tax credit. (See chapter 35.)
      
   6. The earned income credit. (See chapter 37.)
      
   7. The additional child tax credit. (See chapter 35.)
   
   
6. You did not have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option. (See Publication 525, Taxable and Nontaxable Income.)

You can also use Form 1040A if you received employer-provided dependent care benefits or if you owe tax from the recapture of an education credit or the alternative minimum tax.

You must meet all these requirements to use Form 1040A. If you do not, you must use Form 1040.

Form 1040

If you cannot use Form 1040EZ or Form 1040A, you must use Form 1040. You can use Form 1040 to report all types of income, deductions, and credits.

You may pay less tax by filing Form 1040 because you can take itemized deductions, some adjustments to income, and credits you cannot take on Form 1040A or Form 1040EZ.

You must use Form 1040 if any of the following apply.

1. Your taxable income is $100,000 or more.
   
2. You itemize your deductions on Schedule A.
   
3. You had income that cannot be reported on Form 1040EZ or Form 1040A, including tax-exempt interest from private activity bonds issued after August 7, 1986.
   
4. You claim any adjustments to gross income other than the adjustments listed earlier under Form 1040A.
   
5. Your Form W-2, box 12, shows uncollected employee tax (social security and Medicare tax) on tips (see chapter 6) or group-term life insurance (see chapter 5).
   
6. You received $20 or more in tips in any 1 month and did not report all of them to your employer. (See chapter 6.)
   
7. You were a bona fide resident of Puerto Rico and exclude income from sources in Puerto Rico.
   
8. You claim any credits other than the credits listed earlier under Form 1040A.
   
9. You owe the excise tax on insider stock compensation from an expatriated corporation.
   
10. Your Form W-2 shows an amount in box 12 with a code Z.
    
11. You had a qualified health savings account funding distribution from your IRA.
    
12. You are an employee and your employer did not withhold social security and Medicare tax.
    
13. You have to file other forms with your return to report certain exclusions, taxes, or transactions, such as Form 8959 or Form 8960.
    
14. You are a debtor in a bankruptcy case filed after October 16, 2005.
    
15. You must repay the first-time homebuyer credit.
    
16. You have adjusted gross income of more than $152,525 and must reduce the dollar amount of your exemptions.

Does My Return Have To Be on Paper?

You may be able to file a paperless return using IRS e-file (electronic filing). If your 2014 adjusted gross income (AGI) is less than a certain amount, you are eligible for Free File. See your tax return instructions for details. If you do not qualify for Free File, then you should check out IRS.gov for low-cost e-file options or Free File Fillable Forms.

IRS e-file

Table 1-4 lists the benefits of IRS e-file. IRS e-file uses automation to replace most of the manual steps needed to process paper returns. As a result, the processing of e-file returns is faster and more accurate than the processing of paper returns. However, as with a paper return, you are responsible for making sure your return contains accurate information and is filed on time.

Using e-file does not affect your chances of an IRS examination of your return.

Free File Fillable Forms. If you do not need the help of a tax preparer, then Free File Fillable Forms may be for you. These forms:

• Do not have an income requirement so everyone is eligible,
  
• Are easy to use,
  
• Perform basic math calculations,
  
• Are available only at IRS.gov, and
  
• Apply only to a federal tax return.

Electronic return signatures. To file your return electronically, you must sign the return electronically using a personal identification number (PIN). If you are filing online, you must use a Self-Select PIN. If you are filing electronically using a tax practitioner, you can use a Self-Select PIN or a Practitioner PIN.

Self-Select PIN. The Self-Select PIN method allows you to create your own PIN. If you are married filing jointly, you and your spouse will each need to create a PIN and enter these PINs as your electronic signatures.

A PIN is any combination of five digits you choose except five zeros. If you use a PIN, there is nothing to sign and nothing to mail—not even your Forms W-2.

To verify your identity, you will be prompted to enter your adjusted gross income (AGI) from your originally filed 2013 federal income tax return, if applicable. Do not use your AGI from an amended return (Form 1040X) or a math error correction made by the IRS. AGI is the amount shown on your 2013 Form 1040, line 38; Form 1040A, line 22; or Form 1040EZ, line 4. If you do not have your 2013 income tax return, you can quickly request a transcript by using our automated self-service tool. Visit us at IRS.gov and click on Order a Return or Account Transcript or call 1-800-908-9946 to get a free transcript of your return. (If you filed electronically last year, you may use your prior year PIN to verify your identity instead of your prior year AGI. The prior year PIN is the five digit PIN you used to electronically sign your 2013 return.) You will also be prompted to enter your date of birth.

Practitioner PIN. The Practitioner PIN method allows you to authorize your tax practitioner to enter or generate your PIN. The practitioner can provide you with details.

Form 8453. You must send in a paper Form 8453 if you have to attach certain forms or other documents that cannot be electronically filed. For details, see Form 8453.

For more details, visit www.irs.gov/efile and click on “Individuals.”

Identity Protection PIN. If the IRS gave you an identity protection personal identification number (PIN) because you were a victim of identity theft, enter it in the spaces provided on your tax form. If the IRS has not given you this type of number, leave these spaces blank. For more information, see the Instructions for Form 1040A or Form 1040.

Power of attorney. If an agent is signing your return for you, a power of attorney (POA) must be filed. Attach the POA to Form 8453 and file it using that form’s instructions. See Signatures, later, for more information on POAs.

State returns. In most states, you can file an electronic state return simultaneously with your federal return. For more information, check with your local IRS office, state tax agency, tax professional, or the IRS website at www.irs.gov/efile.

Refunds. You can have a refund check mailed to you, or you can have your refund deposited directly to your checking or savings account or split among two or three accounts. With e-file, your refund will be issued faster than if you filed on paper.

As with a paper return, you may not get all of your refund if you owe certain past-due amounts, such as federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or certain other federal nontax debts, such as student loans. See Offset against debts under Refunds, later.

Refund inquiries. Information about your return will generally be available within 24 hours after the IRS receives your e-filed return. See Refund Information, later.

Amount you owe. To avoid late-payment penalties and interest, pay your taxes in full by April 15, 2015. See How To Pay, later, for information on how to pay the amount you owe.

Using Your Personal Computer

You can file your tax return in a fast, easy, and convenient way using your personal computer. A computer with Internet access and tax preparation software are all you need. Best of all, you can e-file from the comfort of your home 24 hours a day, 7 days a week.

IRS approved tax preparation software is available for online use on the Internet, for download from the Internet, and in retail stores. For information, visit www.irs.gov/efile.

Through Employers and Financial Institutions

Some businesses offer free e-file to their employees, members, or customers. Others offer it for a fee. Ask your employer or financial institution if they offer IRS e-file as an employee, member, or customer benefit.

Free Help With Your Return

Free help in preparing your return is available nationwide from IRS-trained volunteers. The Volunteer Income Tax Assistance (VITA) program is designed to help low to moderate income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 or older with their tax returns. Many VITA sites offer free electronic filing and all volunteers will let you know about the credits and deductions you may be entitled to claim. To find a site near you, call 1-800-906-9887. Or to find the nearest AARP TaxAide site, visit AARP’s website at www.aarp.org/taxaide or call 1-888-227-7669. For more information on these programs, go to IRS.gov and enter keyword “VITA” in the search box.

Using a Tax Professional

Many tax professionals electronically file tax returns for their clients. You may personally enter your PIN or complete Form 8879, IRS e-file Signature Authorization, to authorize the tax professional to enter your PIN on your return.

Note. Tax professionals may charge a fee for IRS e-file. Fees can vary depending on the professional and the specific services rendered.

When Do I Have To File?

April 15, 2015, is the due date for filing your 2014 income tax return if you use the calendar year. For a quick view of due dates for filing a return with or without an extension of time to file (discussed later), see Table 1-5.