BritishGuy36

Hypothetical:

Question 1)

What's the current lower threshold for having to file with the IRS? I can find some info about $400 of self-employment earnings....but nothing definitive about if you were employed.

If an LPR earns say, $150 cash in hand, plus about $200 while employed, does one have to file or not?

If not, with future naturalisation in mind, would one write to the IRS explaining why no filing was made for 2009 - or not bother.

Question 2)

If one enters and becomes an LPR most of the way through the year, and doesn't earn anything at all for the rest of that year through Dec 31, is a filing required? Again, a letter?

For both questions, you may presume that the LPR isn't bothered about filing purely to be eligible for any potential stimulus payment(s) - he/she'd rather not have to bother with the paperwork - but not at the expense of potentially hindering naturalisation.

Rete

If you don't have enough income to warrant filing then you don't file. However your spouse will have to file married, separate. If you add your pittance in with her income, you both file one return, married, joint, and get a larger refund because of the additional standard deduction.

Michael

And also the marginal tax brackets are significantly different between married filing seperately and married filing jointly.

Married Filing Jointly
•10% on the income between $0 and $16,700
•15% on the income between $16,700 and $67,900; plus $1,670
•25% on the income between $67,900 and $137,050; plus $9,350
•28% on the income between $137,050 and $208,850; plus $26,637.50
•33% on the income between $208,850 and $372,950; plus $46,741.50
•35% on the income over $372,950; plus $100,894.50

Married Filing Separately Filing Status
•10% on the income between $0 and $8,350
•15% on the income between $8,350 and $33,950; plus $835
•25% on the income between $33,950 and $68,525; plus $4,675
•28% on the income between $68,525 and $104,425; plus $13,318.75
•33% on the income between $104,425 and $186,475; plus $23,370.75
•35% on the income over $186,475; plus $50,447.25

BritishGuy36

Michael

According to your list, wouldn't that mean that an LPR would need to file even if he/she earned $1?

In other words the threshold is $0? I thought it was at least a few hundred.

chartreuse

I'm not being funny, mate, but you're probably putting more effort into getting the answer to this question than it would take to fill out a 1040...

Noorah101

It still depends on the total earnings and whether it meets the minimum threshhold. I don't know what that minimum is, by the way. But cash-earned income is treated the same as payroll-earned income. All income, whether cash or payroll, is to be reported to IRS.

Rene

Norri

I'd file simply for the purpose of having a record to produce if the LPR wishes to naturalize later.
It is better than expalaining why you did not file.

Michael

No, those are the marginal tax rates after the standard or itemized deduction is subtracted from your income. The standard deduction is $5,700 for single or married filing separately or $11,400 for married filing jointly.

However, if you are self employed and made more than $400, you need to file a tax return. This is because you need to pay self employment tax but the "Make Work Pay" tax credit of $400 ($800 if married filing jointly) basically eliminates self employment taxes for the first $2,164 ($4,328 if married filing jointly)

Songbird

Ok I am confused ( nothing new there when it comes to taxes ) DH (USC) has told me we are not required to file in the US as our combined income (his Disability and my UK rental income) is under the filing threshold ?? This (from the H&R Block web site) would seem to confirm this:
"You must file a tax return if your filing status is Married Filing Jointly... and you are both younger than 65 with a combined gross income of $17,900 or more"

Yes we are both under 65 but our income is below that level (Buddy can you spare a dime??)

Is this correct or not because I haven't got a clue!

Peter Newton

For 2009 the filing threshold for married filing joint, both under 65 is $18,700.

It will be worth filing a tax return if you qualify for the earned income tax credit or the child tax credit- you will get a refund as a result.

Songbird

So just to confirm ( because you're the guy-in-the-know when it comes to taxes) our combined income level puts us below the legally required filing threshold, therefore we do not have to file?? (yes you literally have to phonetically ABC it for me when it comes to taxes)

Giantaxe

And that figure comes from adding the standard deduction for mfj to two exemptions (for self and spouse). Similar calculations can be done for the single, head of household and married filing separate filing status (using one exemption in those cases, of course).

And as has been pointed out, this won't apply if you have self employment income over $400 as they need to collect self employment tax on that (about 15.3%, iirc).

Peter Newton

Exactly- unless you also have self employment income over $400, as Giantaxe points out.

There are also a few other "one off cases" where you might have to file: check http://www.irs.gov/individuals/artic...=96623,00.html for details.

Michael

I believe it is even higher than the figures quoted by the others in your case. That is because only a part of Social Security Disability Benefits is taxable.

meauxna

Don't they have to report worldwide income for the calendar year in which they gain LPR status?