Tax Information
Where is My Refund?
Taxpayers who e-filed can get tax refund information 72 hours after the electronic tax return data is acknowledged as accepted by the IRS.
To check the status of a tax refund click on "
Where's My Refund?". Taxpayers without Internet access can get tax refund information by calling
1-800-829-1954 or
1-800-829-4477.
Please note that the IRS does not guarantee a specific date that a tax refund will be deposited into a taxpayer's financial institution account or mailed. However the IRS issues a typical Refund Cycle Chart that can be used as a guide on when you may expect your tax refund.
See IRS Refund Cycle Chart.
Change your address or start a refund trace?
If Where's My Refund? shows that IRS was unable to deliver your tax refund, you can change your address online.
If you don't receive your tax refund within 28 days from the original IRS mailing date shown on Where's My Refund?, you can start a refund trace online.
What you will need to have handy from your tax return to use this IRS site to check the status of your refund, change your address or start a trace:
Your Social Security Number (or Individual Taxpayer Identification Number
Your Filing Status
The exact whole dollar amount of your refund
Things You Need to Know About Tax Refunds
Are you expecting a tax refund from the IRS this year? Here are the top 10 things you should know about your tax refund:
1. Refund options - You have two options for receiving your federal tax refund: a paper check or a direct deposit.
2. Separate accounts - You may use Form 8888, Direct Deposit of Refund to More Than One Account, to have your tax refund split among up to three separate accounts, such as checking or savings or retirement accounts.
3. Paper return processing time - If your return is complete and accurate, your refund will usually be issued within six weeks from the date the IRS receives it.
4. E-filed returns - If you file electronically, your tax refund can be issued in as little as eight days after the acknowledgment date.
5. Check status online - The fastest and easiest way to find out about your tax refund is to go to IRS.gov and click on the "Where's My Refund?" link on the home page. You will need your Social Security number, filing status and the exact amount of your tax refund.
6. Check status by phone - Call the IRS Refund Hotline at 800-829-1954. You will need to your Social Security number, your filing status and the exact amount of your tax refund.
7. Delayed refund - For things that may delay the processing of your return, see common tax return errors under tax tips.
8. Larger than expected refund - Do not cash the check until you receive a notice explaining the difference. Follow the instructions on the notice.
9. Smaller than expected refund - If this happens you may cash the check. If the IRS determines that you should have received more, it will later send the difference. If you did not receive a notice and you have questions about the amount of your refund, wait two weeks and then call 800-829-1040.
10. Missing refund - The IRS will send you a replacement check for a refund check that is lost or stolen. If the IRS was unable to deliver your refund because you moved, you can change your address online. Once your address has been changed, the IRS can reissue the undelivered check. For more information, visit IRS.gov or call 800-829-1040.
Tax Filing Basics
Who Must File
Chart for Most People
Chart for Dependents
Chart for Other Situations When You Must File
Before beginning your tax return, here are a few things you should know to make preparing and filing your tax return easier and less stressful.
Social Security Numbers
It is important that you have the correct social security number and date of birth for each person you will claim as an exemption on your tax return. If each name, social security number, and date of birth do not match exactly when you file the tax return, the IRS will reject your tax return and ask you to submit the correct information.
Recommended Records
Preparing your tax return will be easier if the records you need are organized and readily available.
- Proof of identification
- Social Security Numbers for you, your spouse, and dependents
- Birth dates for you, your spouse, and dependents
- Wages and earnings statements: Forms W-2, W-2G, 1099-R, etc.
- Interest and dividends statements from banks, brokerages, etc.
- A copy of last year's tax return
- Bank routing and account numbers
- The amount you paid for childcare and the childcare provider's tax identification number
- Receipts for charitable donations
Preparing Your Return
You can choose to prepare your tax return yourself or get assistance from a qualified tax professional. If you choose to prepare your tax return yourself, consider using a tax software program to assist you. Tax software can make the preparation easier, help you understand all the credits and deductions you are qualified to receive, and allow you to e-file your tax return. EFILE 411 is an online program that can help you prepare and e-file your taxes, both federal and state.
Filing Status
Determining your filing status is the first step in determining your filing requirements, standard deduction, and correct tax. Your filing status will usually be determined by whether you are married or unmarried. The IRS defines marriage as a legal union between a man and a woman as husband and wife.
Your marital status on the last day of the tax year determines your status for the entire year. If you were separated or divorced under a divorce or separate maintenance decree on the last day of the year, you are considered unmarried for the entire year. State law governs whether you are considered married, legally separated, or divorced under decree.
You are considered married if any of the following are true:
- You are married and living together as husband and wife.
- You are living together in a common-law marriage, where recognized in the state you live in or in the state where the common law marriage began.
- You are married and living apart but not legally separated by a divorce or separate maintenance decree.
- You are separated under a temporary decree of divorce.
If your spouse died during the year, you are considered married for the entire year. If you remarried before the end of the year, you can file jointly with your new spouse and file a married filing separately return for your deceased spouse.
There are five filing statuses:
Single Married Filing Jointly
Married Filing Separately
Head of Household
Qualifying Widow(er) with Dependent Child
Single
You can only file as single if you are unmarried or considered unmarried for the entire year. If you have dependents who you can claim as an exemption, you may be able to file as head of household, which usually results in a lower tax than filing as single.
Married Filing Jointly
If you are married or are considered married, and you and your spouse agree, you can file married filing jointly. Filing jointly usually results in a lower tax than filing separately.
If you and your spouse elect to file jointly, you both can be held responsible, separately or together, for the tax and any interest or penalty due on your tax return.
Married Filing Separately
If you are married or are considered married and you and your spouse do not agree to file jointly, you can file married filing separately. If you file a separate tax return you generally only report your own income, credits, exemptions, and deductions. Filing separate returns usually results in a higher combined tax.
Head of Household
Filing as head of household usually results in a lower tax than filing singly or married filing separately. You can file as head of household if you are single or unmarried, paid more than half the cost of keeping up a home, and had a qualifying child or qualifying relative that lived with you in the home for more than half the year. But if the qualifying relative is your parent, he or she does not have to live with you. You must be able to claim an exemption for the parent, and you must pay more than half of the cost of the parent's household expenses.
If you are married you can file as head of household if you can be considered unmarried. All of the following must be true:
- You and your spouse file separately.
- You pay more than 50% of the expenses of maintaining the household.
- Your spouse did not live in the home for the last 6 months of the year.
- The household is the principal home of a qualifying person or child.
- You can claim an exemption for a qualifying person or child.
You can also file as head of household if your spouse was a nonresident alien at any time during the year. However, your spouse does not count as a qualifying person. You must have another person and meet all the other tests to qualify for head of household.
Qualifying Widow(er)
If your spouse died during the year, you generally can file married filing jointly. For two years after the death of your spouse you can file as qualifying widow(er) if all of the following are true:
- You did not remarry.
- You qualified to file married filing jointly with your spouse in the year your spouse died.
- You pay more than 50% of the expenses of maintaining the household.
- The household is the principal home of a qualifying child.
- You can claim an exemption for a qualifying child.
- Our tax software is so easy to use that it will work you right through and help you to determine your filing status.
Exemptions
Exemptions directly reduce your taxable income. You are allowed a personal exemption for yourself, your spouse if married filing jointly, and each person you can claim as a dependent. For 2009, the exemption amount is $3,650, unless your income exceeds certain limits (see Phaseout of Exemptions).
You can take a personal exemption for yourself unless another taxpayer can claim you as a dependent. Even if the other taxpayer does not take an exemption for you, you cannot claim the personal exemption.
Spouse Exemption
If you file a joint return, you can claim an exemption for your spouse.
If you are filing separate returns, or as head of household, you can claim an exemption for your spouse only if you meet all of the following:
Your spouse has no gross income.
Your spouse is not filing a return.
Your spouse was not another taxpayer's dependent.
If your spouse could be claimed as someone else's dependent, you cannot claim the exemption, even if the other taxpayer does not claim the exemption for your spouse.
If your spouse died during the year and you did not remarry, you can claim an exemption for your spouse if you are filing a joint return in the year of your spouse's death.
Dependent Exemptions
You can claim one exemption for each person you can claim as a dependent. Even if your dependent files a return, you can still claim a personal exemption for him or her.
You can take one exemption for each qualifying child or relative if the person meets three tests:
Dependent Taxpayer Test
If you could be claimed as a dependent by another taxpayer, you cannot claim anyone else as your dependent. This is true even if you have a qualifying child or relative.
Joint Return Test
You generally cannot claim a married person as a dependent if he or she files a joint return.
This test does not apply if a joint return is filed by a dependent only to claim a refund and no tax liability exists for either spouse, even if they filed separate returns.
Citizen or Resident Test
You cannot claim an exemption for a dependent unless the person is a U.S. citizen, resident alien, national, or a resident of Canada or Mexico for at least part of the year.
If you are a U.S. citizen or national who has legally adopted a child who is not a U.S. citizen, resident alien, or national, this test is met if the dependent lived as a member of your household the entire tax year.
Non-Resident Aliens
If you are a non-resident alien, generally you can only claim an exemption for yourself. You cannot claim an exemption for your spouse or any dependents.
This does not apply to residents of Canada, Mexico, or certain residents of India and Korea. This also does not apply if you are a non-resident alien married to a U.S. citizen or resident alien, and have chosen to be treated as a resident of the United States.
Phase-out of Exemptions
For 2009, the exemption amount is gradually reduced, but not below $2,433 per exemption, as your modified adjusted gross income exceeds these amounts:
$125,100 for married filing separately filing status
$166,800 for single filing status
$208,500 for head of household filing status
$250,200 for married filing jointly or qualifying widow(er) filing status
Taxpayer Identification Number
Each taxpayer who files a tax return must have an identifying number. In addition, each dependent claimed on a tax return must have an identifying number. The identifying number can be a Social Security Number, Adoption Taxpayer Identification Number, or Individual Taxpayer Identification Number.
Social Security Number
A Social Security Number is an identifying number issued by the Social Security Administration. The only Social Security Numbers valid for tax filing are ones issued to U.S. citizens, noncitizens lawfully admitted for permanent residence, or noncitizens permitted to work permanently in the United States.
To apply for a Social Security Number you will need to file Form SS-5.
Adoption Taxpayer Identification Number
The IRS issues an Adoption Taxpayer Identification Number (ATIN) as a temporary identification number for the child of a domestic adoption. This number is assigned when the adopting taxpayers are unable to obtain a Social Security Number (SSN) for the child. Refer to Adoption Taxpayer Identification Number for more information.
Individual Taxpayer Identification Number
An Individual Taxpayer Identification Number (ITIN) is an identifying number issued by the IRS. The number is only valid for filing your tax return. The IRS issues ITINs to filers or dependendents who do not have a Social Security Number and are not eligible to receive one. ITINs are issued regardless of immigration status.
An ITIN is only used for tax reporting. An ITIN does not:
Authorize a person to work in the United States
Provide eligibility for Social Security benefits
Provide eligibility for the earned income credit
When applying for an ITIN you will need to provide proof of identity. The documents will need to prove your identity and foreign status. If you have an unexpired passport you will not need any other form of identity. If you do not have a valid passport you will need to provide a notarized or certified copy of at least two of the following document types:
- National identification card
- U.S. or foreign driver's license
- Civil birth certificate
- U.S. state identification card
- Foreign voter's registration card
- U.S. or foreign military identification card
- Visa
- U.S. Citizenship and Immigration Services photo identification
- Medical records (dependents under 14 years old only)
- School records (dependents or students under 25 years old only)
To apply for an ITIN, use one of these options:
Attach Form W-7 to your federal income tax return.
Due Dates
For most taxpayers, April 15 is the due date for filing a tax return. If you use a fiscal year, a year that ends on the last day of a month other than December, your return is due the 15th day of the fourth month after the close of your fiscal year. Example: if your fiscal year ends June 30, your tax return due date would be October 15.
If the due date falls on a Saturday, Sunday, or legal holiday, the due date is extended to the next business day.
If you cannot file your tax return by the due date, you can request an automatic six-month extension of time to file. To request an extension, file Form 4868 no later than the due date of the tax return.
Requesting an extension of time to file does not entitle you to an extension of time to pay tax. If you do not pay tax by the due date of your tax return, you will owe interest on past-due tax in addition to late payment penalties.
If you are a U.S. citizen or resident and your main place of business is located outside of the United States or Puerto Rico, you are allowed an automatic extension until June 15 to file and pay tax that is due. This also applies to members of the military stationed outside the United States or Puerto Rico. If you choose to use this automatic extension, you must attach a statement to your tax return showing that you met the requirements for the extension.
You should file tax returns when they are due, regardless of whether you can make full payment with the return. Failure to file can be costly, and a delay in filing may result in a late penalty and interest charges that could increase your tax bill by 25% or more.
Taxable Income Overview
Income
Income is the compensation you receive in exchange for labor, services, the sale of goods or property, or as a profit from investments. Income can be in many forms, including cash or cash equivalents, properties, securities, and services.
Generally, amounts included in your income are taxable unless they are specifically exempted by law. You are usually taxed on income available to you, regardless of whether the income is actually in your possession. For example, an un -cashed check is income.
Alimony
Payments received from a spouse or former spouse under a divorce or separation instrument are considered alimony payments and are generally taxable income.
A divorce or separation instrument is any of the following:
A decree of divorce or separate maintenance or a written instrument incident to that decree
A written separation agreement
A decree or court order requiring a spouse to make payments for the support or maintenance of the other spouse
This includes temporary decrees.
Only cash payments, including checks or money orders, qualify as alimony. The payments can be made directly to to you or to a third party as part of the separation instrument or under your written consent.
Alimony payments do not include:
Child support
Non-cash property settlements
Payments to keep up the payer's property
Use of property
If both alimony and child support payments are required, and you receive less than the total amount required by the instrument, apply payments first to child support and then to alimony.
You and your spouse or former spouse cannot be members of the same household, even if you are legally separated under an instrument.
A home you formerly shared is considered one household, even if you are physically separated within the home. However, you are not members of the same household if one of you is preparing to leave the house and leaves within one month after the date of the alimony payment.
Jointly Owned Homes
If your spouse or former spouse makes all of the payments on a home that you jointly own, you must include one-half of the payments as alimony. In addition, if your spouse makes all of the real estate tax and home insurance payments, you must include one-half of the payments as alimony.
Dividend Income
Dividends are distributions of money, stock, or other property, paid to you by a corporation. Dividends are also received from a partnership, estate, trust, or an association taxed as a corporation.
Many kinds of dividends you receive are actually interest income, not dividend income. This includes dividends paid on deposits or share accounts in cooperative banks, credit unions, domestic savings and loan institutions, federal savings and loan associations, and mutual savings banks. Dividends that are actually interest are reported on Schedule B.
For most types of dividends, you should receive a Form 1099-DIV from the payer of the dividends. Even if you do not receive this form, it is still your responsibility to report the income on your tax return.
Ordinary Dividends
Ordinary dividends are paid out of the earnings and profits of a corporation and are paid to you on stock or holdings you have with the paying company. These dividends are generally ordinary income, not capital gain income. You can assume that dividends you receive on common stock and preferred stock are ordinary dividends unless the corporation tells you otherwise.
Ordinary dividends are reported in Box 1 of Form 1099-DIV.
Qualified Dividends
Qualified dividends are ordinary dividends meeting special requirements to qualify for the 5% or 15% maximum tax rate. All the following must be true:
Dividends must have been paid by a U.S. corporation or qualifying foreign corporation.
Holding period requirements were met:
You must have held the stock for 60 days during the 121-day period that begins 60 days before the ex-dividend date.
The ex-dividend date is the first day following the declaration the buyer will not receive the next dividend payment.
The dividends are not:
Capital gain distributions
From a tax-exempt corporation
From an employee stock ownership plan maintained by the paying corporation
Payments that are in lieu of dividends
Actually treated as interest income
Which tax rate the dividends qualify for depends on what the regular tax rate on the dividends would be. This is determined by your tax rate on earned income.
Dividends subject to the 25% or higher regular tax rate are subject to 15% tax.
Dividends subject to 24% or less regular tax rate are subject to 5% tax.
For more information, See Irs Publication 550.
Interest Income
In general, any interest you receive through an account credit or other means is taxable income. This includes interest on bank accounts, money market accounts, and deposited insurance dividends. Dividends paid on deposits or share accounts in cooperative banks, credit unions, domestic savings and loan institutions, federal savings and loan associations, and mutual savings banks are also considered taxable interest income.
For most types of interest income over $10, you should receive a Form 1099-INT from the payer of the interest. Even if you do not receive this form, it is still your responsibility to report the income on your tax return.
Interest income is reported on Schedule B. If your taxable interest is less than $1,500, you may report the interest directly on your Form 1040, Form 1040A, or Form 1040-EZ.
Original Issue Discount
Original Issue Discount (OID) is the excess or deficiency of the stated redemption price over the issue price of a debt instrument. Generally, at the time a debt instrument (such as a bond) is purchased, the original issue is the amount you pay to purchase the instrument. The payments you receive, whether yearly or all at once, that are in excess of the original purchase price, are taxable interest income.
Non-Taxable Interest Income
Series EE U.S. Savings Bond interest can be nontaxable interest income if the redemption of the bond is used to pay qualified higher education expenses. The IRS will verify the eligibility of your claim with the bond redemption information given by the Department of Treasury. To qualify, all the following must be true:
- Your filing status must not be married filing separately.
- The bond must have been issued after December 31, 1989 at a discount.
- The taxpayer, taxpayer's spouse, or dependent must incur tuition fees at a qualified higher education institute.
- The purchaser of the bonds must be the owner of the bonds (or the person's spouse).
- You must be at least 24 years old before the bond issue date.
Nominee interest is interest you receive on behalf of the real owner of the investment that produced interest income. You must report the amount of interest you received on Schedule B, but you will also report that the interest does not belong to you and you will not pay tax on the amount. You must give the real owner a Form 1099-INT and that person will pay tax on the interest income.
Frozen deposits are interest amounts that are accrued during the tax year but are not available for you to withdraw for either of these reasons:
The financial institution is bankrupt or insolvent.
The state in which the institution is located has placed limits on withdrawals due to other financial institutions becoming insolvent or bankrupt.
You do not report this type of interest until the funds become available to you.
State and local government payments to the holder of a state or local government obligation, such as municipal bonds, are generally exempt from federal income tax. Although you may not have to pay tax on the interest earned, you still must report the interest on Schedule B.
Social Security Income
Social Security income or equivalent railroad retirement benefit amounts you received may or may not be taxable, depending on other income you or your spouse received in the tax year.
When Benefits Are Taxable
If you received no other income during the year, it is likely your benefits will not be taxable.
If you did receive other income, your benefits will be taxed if one-half of your benefits plus all other income, including tax-exempt interest, exceeds the base amount for your filing status. The base amounts are:
- $25,000 if your filing status is single, head of household, or qualifying widow(er)
- $25,000 if your filing status is married filing separately and you lived apart from your spouse all of the tax year
- $32,000 if your filing status is married filing jointly
- $0 if your filing status is married filing separately and you lived with your spouse at any time during the tax year
If your filing status is married filing jointly, you must include benefits and income received by both you and your spouse when determining whether the benefits are taxable.
If the benefits are deemed taxable they must be included in the gross income of the person who has the legal right to receive the benefits. If both you and your child receive benefits, and the check for your child's portion is made out to you, you do not include the benefits in your portion when determining if any amount is taxable. The child's portion must be added to the child's other income to determine if the benefits are taxable to your child.
How Much Is Taxable?
Generally up to 50% of benefits that are deemed taxable are subject to tax. However, up to 85% of your benefits are taxable if:
The total of one-half of your benefits and all other income is more than $34,000, or $44,000 if your filing status is married filing jointly.
Your filing status is married filing separately and you lived with your spouse at any time during the tax year.
Social Security benefits are reported on Form SSA-1099.
Railroad retirement benefits are reported on Form RRB-1099.
Tip Income
Tips paid in cash, a cash equivalent, or a non-cash transaction are taxable income and are treated as wages subject to FICA, FUTA, and income tax.
Reporting Tips
You should report tips to your employer on Form 4070, or by another method defined by your employer. All tips should be reported to your employer so your employer can report the correct amount of wages to the Social Security Administration.
Tips reported to your employer are reported in box 1 of Form W-2 and are subject to income tax withholding.
Tips should be reported monthly by the 10th day of the next month. For example you must report tips received in May to your employer by June 10.
If you do not report tips to your employer, you may be subject to a penalty equal to 50 percent of the social security and Medicare taxes that you owe on the unreported tips. The unreported tips must be reported on Form 4137 of your tax return.
Allocated Tips
Allocated tips are tips assigned to you by your employer. These tips are in addition to the tips that you report to your employer. Your employer can allocated tips only if all the following are true:
You worked in a restaurant, cocktail lounge, or similar business that must allocate tips to employees.
The tips you reported to your employer were less than your share of 8 percent of food and drink sales.
You did not participate in your employer's Attributed Tip Income Program.
Allocated tips are reported in box 8 of Form W-2 and are not subject to social security and Medicare tax withholding. You must fill out Form 4137, reporting the amount from box 8 on line 1.
Withholdings
The federal income tax is a pay-as-you-go tax. You must pay taxes as you earn or receive income throughout the year.
There are two methods for paying taxes:
Withholding
If you are an employee, your employer probably withholds income tax from your paycheck.
Income received from pensions, bonuses, commissions, gambling winnings, and other sources may also have income tax withheld from the amount you receive.
The amounts withheld are paid to the IRS on your behalf.
Estimated Tax Payments
If you do not pay taxes through withholding, or do not pay enough tax through withholding, you may need to make estimated tax payments to make up the deficit.
Generally, people who are in business for themselves pay their taxes through estimated payments.
Tax on income received from dividends, interest, rents, royalties, and capital gains is generally paid through estimated payments.
If you do not have enough taxes withheld, or you do not pay enough in estimated taxes, you may be subject to a penalty for underpaying your taxes.
If your income is low enough that you will not have to pay income tax, you may be exempt from income tax withholding. You may still be subject to Social Security and Medicare tax withholdings. You can claim an exemption from income tax withholding only if:
For the prior tax year you received a refund, or were entitled to a refund, of all federal income tax withheld because you had no tax liability.
For the current tax year you expect to receive a refund of all federal income tax withheld because you expect to have no tax liability.
W-4
The amount of income tax your employer withholds from your pay depends on the amount you earn and the information you have provided your employer on Form W-4. Form W-4 includes information to help you and your employer determine the correct amount of tax to withhold.
When you start a new job, you must fill out Form W-4 and give it to your employer. If you need to change your filing status or number of allowances at any time, you should fill out a new Form W-4 and give it to your employer. You can submit a new Form W-4 whenever you wish to change your withholding. It is important to have enough income tax withheld to avoid an underpayment penalty when you file your tax return.
Since Form W-4 cannot account for all situations, you may need to factor additional circumstances when determining the correct amount of withholding. Some common situations that may cause incorrect withholding:
- You are married and both you and your spouse work.
- You have more than one job at a time.
- You have non-wage taxable income (interest, dividends, alimony, etc.).
- You will owe additional amounts with your return (self-employment tax, etc.).
- Your earnings exceed $130,000, or $180,000 if your filing status is married filing jointly.
- You only work part of the year.
- You change the number of your withholding allowances during the year.
Completing Form W-4
Marital Status - Married persons qualify for a lower tax rate by checking the "Married" box on Form W-4. Check this box if all the following are true:
Your filing status will be married filing jointly or qualifying widow(er).
You will be considered married for the whole year.
Neither you nor your spouse is a nonresident alien.
Withholding Allowances - The more allowances you claim, the lower your withholding rate will be. The number of allowances you can claim depends on:
- How many exemptions you can take on your tax return
- Whether you have income from more than one job
- What deductions, adjustments to income, and credits you expect to have in the tax year
- Whether your filing status will be head of household
- If your filing status is married filing jointly, whether your spouse works and claims allowances on his or her Form W-4
Penalties
If you deliberately and knowingly make false claims on your Form W-4 in an attempt to reduce or eliminate proper tax withholding, you may have to pay a penalty of $500 if:
- You make statements or claim allowances on your W-4 that reduce the amount of tax withheld.
- You have no reasonable basis for the statements or allowances at the time you fill out the W-4.
There is also a criminal penalty for supplying false information on your W-4. The penalty upon conviction can be a fine of up to $1,000 or up to one year imprisonment, or both.
An error or honest mistake will not result in these penalties.
Dependents
In general you may claim a dependency exemption for each qualifying child or qualifying relative. If you are the dependent of another taxpayer, you cannot claim any other person as a dependent.
General Dependent Tax Filing Guidelines
If your parent (or someone else) can claim you as a dependent, use this chart to see if you must file a return.
In this chart, unearned income includes taxable interest, ordinary dividends, and capital gain distributions. It also includes unemployment compensation, taxable social security benefits, pensions, annuities, and distributions of unearned income from a trust. Earned income includes salaries, wages, tips, professional fees, and taxable scholarship and fellowship grants. Gross income is the total of your unearned and earned income.
Single dependents. Were you either age 65 or older or blind?
No. You must file a tax return if any of the following apply.
Your unearned income was over $950.
Your earned income was over $5,700.
Your gross income was more than the larger of-
$950, or
Your earned income (up to $5,400) plus $300.
Yes. You must file a tax return if any of the following apply.
Your unearned income was over $2,350 ($3,750 if 65 or older and blind).
Your earned income was over $7,100 ($8,500 if 65 or older and blind).
Your gross income was more than the larger of-
$2,350 ($3,750 if 65 or older and blind), or
Your earned income (up to $5,400) plus $1,700 ($3,100 if 65 or older and blind).
Married dependents. Were you either age 65 or older or blind?
No. You must file a tax return if any of the following apply.
Your unearned income was over $950.
Your earned income was over $5,700.
Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
Your gross income was more than the larger of-
$950, or
Your earned income (up to $5,400) plus $300.
Yes. You must file a tax return if any of the following apply.
Your unearned income was over $2,050 ($3,150 if 65 or older and blind).
Your earned income was over $6,800 ($7,900 if 65 or older and blind).
Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
Your gross income was more than the larger of-
$2,050 ($3,150 if 65 or older and blind), or
Your earned income (up to $5,400) plus $1,400 ($2,500 if 65 or older and blind).
Qualifying Child
The qualifying child or relative must be a citizen, resident alien, or national of the United States, or a resident of Canada or Mexico. An exception may apply for an adopted child that is not a citizen, national, or resident alien.
The qualifying child or relative must not file a joint tax return, unless all the following are true:
The sole purpose of filing the joint return is to claim a refund.
No return needs to be filed except to claim a refund.
The return has no tax liability.
The qualifying child or relative must have a valid identifying number. This number can be any of the following:
Social Security Number
Individual Taxpayer Identification Number
Adoption Taxpayer Identification Number
Having a qualifying child as a dependent can allow you to claim certain tax benefits, including:
- Head of household filing status
- The child tax credit
- The additional child tax credit
- The child and dependent care credit
- The earned income tax credit
- An additional personal exemption for each dependent
In addition to the conditions the child must meet to qualify, there are additional conditions for each of these tax benefits. See the instructions for each benefit for more details.
A child or relative is considered your qualifying child if he or she meets four tests.
1. Relationship - the person must be related to you in one of these ways:
Child or stepchild
Eligible foster child
Sibling or step-sibling
A descendant of any of the above
2. Age - at least one of the following must be true:
Under age 19 at the end of the tax year
A full-time student under 24 at the end of the year
Permanently and totally disabled at any time during the year, regardless of age
3. Residency - the person must have lived with you more than half of the tax year.
If the child was born or died during the year, the child is considered to have lived with you the entire year.
4. Support - The child must have not provided more than half of his or her own support during the year.
If you are divorced or separated from the other parent of the child, or if someone other than yourself can also claim the child as a qualifying child, special rules apply:
If one of the taxpayers is the parent of the child, that taxpayer will claim the child.
If more than one of the taxpayers is the parent of the child, the person with whom the child lived the most during the year will claim the child.
If the time was equal, the child will be claimed by the parent with the highest adjusted gross income.
If no taxpayer is the parent of the child, the child will be claimed by the taxpayer with the highest adjusted gross income.
Qualifying Relative
A relative can be your dependent if the person meets four tests.
1. Not a Qualifying Child Test
A child is not your qualifying relative if the child is your qualifying child or the qualifying child of any other taxpayer. If a child would be a qualifying child except for not meeting the residency test, the child may be your qualifying relative. If the child does not live with you, but lives in Canada or Mexico, and meets the gross income test and the support test, the child can be your qualifying relative.
2. Member of Household or Relationship Test
One of these must be true:
The person lived with you all year as a member of your household.
The person is related to you in any of these ways:
Child or stepchild
Eligible foster child
Sibling or step-sibling
A descendant of any of the above
Direct ancestor (parent, grandparent, step-parent, etc.)
Niece or nephew
Brother or sister of your parent
In-laws
3. Gross Income Test
The person must have gross income of less than $3,500 for the year.
4. Support Test
You must provide more than half of the person's total support for the calendar year. You can figure this by comparing the amount you contributed to that person's support to the entire amount of support that person received from all sources, including the support the person provided from his or her own funds.
The support test is applied to each individual separately. For example, if you are determining the qualifications of your parents, you must figure the support test for each parent separately.
Expenses that are not directly related to one member of a household should be divided among the members of the household.
Support expenses include:
Food
Lodging
Clothing
Education
Medical and dental care
Recreation
Transportation
Ordinary and necessary expenses to live
Overview of Tax Credits for Dependents
There are several tax credits available to families with dependent children. These credits are intended to reduce tax liability for families who have expenses for caring for dependent children.
Child and Dependent Care
The child and dependent care credit is available to families who pay childcare expenses. The expenses must have been incurred so that you and your spouse can work or look for work. The credit is based on a percentage of the expenses you pay.
Child Tax Credit
The child tax credit is available to families that have a qualifying child under the age 17. The credit is non-refundable, which means you must have tax liability to claim the credit.
Additional Child Tax Credit
The additional child tax credit is available to families who have a qualifying child under the age 17 and who did not receive the full amount of the child tax credit because they did not have any tax liability. This credit is refundable, which means you do not have to have any tax liability to claim the credit.
Education Credits
Education tax credits are available to individuals and families who have out-of-pocket post-secondary tuition expenses. The Hope credit is available to students completing their first two years of post-secondary school. The lifetime learning credit is available to students in any phase of post-secondary education.
Adoption Credit
The adoption tax credit is available to families who have out-of-pocket adoption expenses. You can use the credit to exclude any employer-provided adoption
Child Support
Child support payments are not tax deductible for the payer, nor do they count as taxable income for the payee. If you pay child support, you may be able to claim the child as a dependent. The parent with whom the child lived for the longest time of the tax year generally can claim the child as a dependent.
Release of Claim to Exemption
If you have a child who does not live with you, you may be able to claim the child as a dependent if the parent with whom the child lives signs a release of claim to exemption, Form 8832.
Earned Income Credit
Child support payments that you receive are not counted as earned income when figuring eligibility for the earned income credit.
Adoption Taxpayer Identification Number (ATIN)
An Adoption Taxpayer Identification Number (ATIN) is issued by the IRS as a temporary identification number for an adoptive child. This number is assigned when the adopting taxpayers are unable to obtain a Social Security Number (SSN) for the child.
An ATIN is not intended to be a permanent identifying number; it will expire two years after the date of issue or when you receive a valid SSN for the child. Once the adoption is final, you should apply for an SSN for the child.
When you get the SSN, notify the IRS. If the adoption is not final before the ATIN expires, you can apply for an extension. Six months before the end of the two-year period, you will receive instructions from the IRS on how to apply for an extension.
You cannot claim the child as a dependent or claim any childcare expenses for the child without an identifying number.
Who Should Apply
You should apply for an ATIN only if you are in the process of adopting a child and all of the following are true:
The child is legally placed in your home by an authorized adoption agency for legal adoption.
The adoption is a domestic adoption or is a foreign adoption and the child has a Permanent Resident Alien card or a Certification of Citizenship.
You cannot obtain the child's existing SSN even though you have made a reasonable attempt to do so.
You cannot obtain a new SSN for the child from the Social Security Administration.
You are eligible to claim the child as a dependent on your tax return.
How to Apply
To apply you must file Form W-7A. To file this form you will need:
- Name of the child
- Birth information
- Placement agency information
- Placement documentation
Placement documentation is the signed documentation that places the child in your care for legal adoption. The type of documentation varies by state. All documentation types should clearly establish the child was placed in your home by an authorized adoption agency for the purpose of adoption.
Generally, this documentation can be any of the following:
- A placement agreement between you and a public or private adoption agency
- A document signed by a hospital official releasing a newborn child to you for adoption
- A court order or other court document ordering or approving the placement of the child with you for legal adoption
- An affidavit signed by an attorney, government official, judge, or similar appointee approving the placement of the child with you pursuant to the state's legal adoption laws
Regardless of which type of documentation is used, it must include:
- Full name of adoptive parent(s)
- Full name of child
- Name of the placement agency or agent
- Date the child was placed in your home
- Signature of the parent(s) and the official representative of the placing agency
Do not attach original documents when filing Form W-7A. A copy of the documentation is acceptable. The IRS will not return any documents.
An ATIN is not valid for claiming the Earned Income Credit (EIC). If the child qualifies you for EIC, you can file an amended return after you get the child's SSN.
It takes about 4–8 weeks to receive an ATIN after you submit Form W-7A. If you have not received the ATIN after 8 weeks, contact the IRS at (512) 460-7898.
Kiddie Tax
For 2009, a child under 19 (or 24 if a full-time student) who meets all the following criteria, and who receives more than $1,800 in investment income, must pay tax (kiddie tax) on that income.
Criteria
The child must:
Be a full-time student
Have at least one living parent
Have not filed a joint tax return
Not have had enough income to provide at least half of his or her own support
Investment Income
Investment income includes:
- Taxable interest
- Ordinary dividends
- Capital gains
- Rents and royalties
- Taxable Social Security benefits
- Pension and annuity income
- Income received as the beneficiary of a trust
Parent's Election to Claim Child's Income
In some cases, the parent can elect to claim the child's interest, ordinary dividends, and capital gain distributions on the parent's tax return. The parent can elect to claim the child's interest if the child:
- Is under 19, or 24 if a full-time student, at the end of the tax year
- Did not have any form of income other than investment income
- Gross income is less than $9,000
- Did not make any estimated tax payments
- Is not filing a married filing joint return
If your child qualifies to make the election, at least one of the following must be true to be able to claim the investment income:
- You are filing a joint return with the child's other parent.
- You and the child's other parent are married but filing separately and you have the higher taxable income.
- You were unmarried and treated as unmarried and the child lived with you most of the year.
- You were remarried and you and your new spouse are filing a joint return.
- You were remarried and you and your new spouse are filing separate returns and you have the higher taxable income.
To claim the child's income on your tax return, you must file Form 8814 with your tax return.
Child Claiming Income
If you or the child does not qualify to claim the child's investment income on the your tax return, a tax return with Form 8615 must be filed for the child. You can also elect to file a return for the child even if the child and you qualify to claim the income on your tax return.
When filing a tax return for the child, the income will be taxed at your tax rate. If your taxable income, filing status, or net income of other children is not known by the due date of the return, you can estimate the amounts or request an automatic six-month extension to file. If you choose to estimate the amount, you must file an amended return when all of the information has been determined.
Multiple Support
Sometimes no one provides more than half of a person's support, but two or more people together do provide more than half of the support. In these situations, only one person may claim the dependent exemption, and that person must have provided more than 10% of the individual's support. If more than one person provided more than 10% of the support, those persons can agree among themselves who will claim the individual as a qualifying relative.
Each person who provided more than 10% of the individual's support must sign a statement agreeing not to claim the dependent exemption for the tax year. The person who claims the exemption must keep the signed statements for his or her records, and must identify in his or her return the persons who have agreed not to claim the exemption. Form 2120, Multiple Support Declaration, may be used for this.
Tax Credit Overview
A tax credit reduces the amount of tax for which you are liable. Unlike a deduction, which reduces the amount of income subject to tax, a tax credit directly reduces your tax liability.
A tax credit is usually more valuable than a tax deduction of the same dollar amount. There are two categories of tax credits:
- Refundable credits
- Non-refundable credits
Non-Refundable Tax Credits
Most, but not all, tax credits are referred to as non-refundable credits. A non-refundable credit is a tax credit that can reduce your tax liability to zero, but not below. You must have tax liability on line 46 of Form 1040, line 18 of Form 1040A, or line 43 of Form 1040NR to claim a non-refundable tax credit.
Non-refundable tax credits include:
American Opportunity Tax Credit
For tax years 2009 and 2010, there is a new education credit called the American opportunity tax credit (AOC). This is a modification of the Hope Credit.
- The maximum amount of the AOC is $2,500 per student. The credit is phased out (gradually reduced) if your modified adjusted gross income (AGI) is between $80,000 and $90,000 ($160,000 and $180,000 if you file a joint return). Exception. For 2009, if you claim a Hope credit for a student who attended a school in a Midwestern disaster area, you can choose to figure the amount of the credit using the previous rules. However, you must use the previous rules in figuring the credit for all students for which you claim the credit.
- The credit can be claimed for the first four years of post-secondary education. Previously the credit could be claimed for only the first two years of post-secondary education.
- Generally, 40% of the AOC is now a refundable credit for most taxpayers, which means that you can receive up to $1,000 even if you owe no taxes.
- The term "qualified tuition and related expenses" has been expanded to include expenditures for "course materials." For this purpose, the term "course materials" means books, supplies, and equipment needed for a course of study whether or not the materials must be purchased from the educational institution as a condition of enrollment or attendance.
Income limits for Hope and lifetime learning credit reduction increased. For 2009, the amount of your Hope or lifetime learning credit is phased out (gradually reduced) if your modified adjusted gross income (AGI) is between $50,000 and $60,000 ($100,000 and $120,000 if you file a joint return). You cannot claim a Hope or lifetime learning credit if your modified AGI is $60,000 or more ($120,000 or more if you file a joint return). For more information, see chapters 3 and 4 in Publication 970.
Refundable Tax Credits
A refundable tax credit is a tax credit that can reduce your tax liability below zero. Because it is possible to receive a refund based on these types of credits, the credits are referred to as refundable.
Refundable tax credits include:
Earned Income Credit
Amount of credit increased. The maximum amount of the credit has increased. The most you can get for 2009 is:
$3,043 if you have one qualifying child,
$5,028 if you have two qualifying children,
$5,657 if you have three or more qualifying children, or
$457 if you do not have a qualifying child.
Earned income amount increased. The maximum amount of income you can earn and still get the credit has increased for 2009. You may be able to take the credit if:
- You have three or more qualifying children and you earn less than $43,279 ($48,279 if married filing jointly)
- You have two qualifying children and you earn less than $40,295 ($45,295 if married filing jointly),
- You have one qualifying child and you earn less than $35,463 ($40,463 if married filing jointly), or
- You do not have a qualifying child and you earn less than $13,440 ($18,440 if married filing jointly).
The maximum amount of adjusted gross income (AGI) you can have and still get the credit also has increased. You may be able to take the credit if your AGI is less than the amount in the above list that applies to you.
Investment income amount increased .The maximum amount of investment income you can have and still get the credit has increased to $3,100 for 2009.
Advance payment of the credit. If you get advance payments of the credit from your employer with your pay, the total advance payments you get during 2009 can be as much as $1,826
your modified AGI is $60,000 or more ($120,000 or more if you file a joint return). For more information, see chapters 3 and 4 in Publication 970.
Eligible for the Hope credit? For 2009, you can claim a Hope credit only if at least one eligible student is attending an eligible educational institution in a Midwestern disaster area and you do not claim an American opportunity credit for any other student in the same year.
Tax Deductions
Tax deductions are expenses that reduce the amount of income subject to tax.
There are two types of tax deductions most taxpayers will qualify for:
Standard
Itemized
In addition to these two types of tax deductions, there are also tax deductions available to taxpayers who take either the standard deduction or who itemize deductions.
There are over 50,000 tax deductions in tax code and regulations. Many of these deductions apply to individuals as well as businesses. The most common tax deductions include:
The Standard deduction:
The Standard deduction is a fixed dollar amount based on your filing status.
Itemized deductions
Miscellaneous itemized deductions
For more information on itemized deductions please refer to www.irs.gov
Standard Deduction
The standard tax deduction is a dollar amount that reduces the amount of income subject to tax. You cannot take the standard tax deduction if you are claiming itemized tax deductions.
The standard tax deduction is a fixed dollar amount that depends on your filing status and the amounts for 2009 are:
Single or Married Filing Separately $5,700
Married Filing Jointly of Qualifying Widow(er) $11,400
Head of Household $8,350
Refunds
Over withholding and Your W-4
If you find yourself expecting a large tax refund, ask yourself, "Am I withholding too much on my W-4?" Remember that a refund of taxes means you are getting back money that you could have used, or banked, or put into your 401(k), during the entire tax year. It's poor money management if you consistently receive large tax refunds year after year.
If your large tax refund is a result of over withholding on your W-4, visit Withholding to learn more about your W-4 allowance and how it affects your tax refund.
Direct Deposit
Gone are the days when taxpayers eagerly checked their mailboxes for their income tax refunds. Direct Deposit, first offered in 1987, made receiving a tax refund a fast and safe proposition. Direct deposit is still popular, with more than 59 million individuals choosing to have their tax refund deposited directly into their bank accounts.
Direct deposit of your federal income tax refund is available whether you file electronically or with paper forms.
You can use direct deposit to any United States financial institution, so long as you provide a valid routing number and account number. Some financial institutions do not allow joint refunds to be deposited into individual accounts. Check with your financial institution to ensure that your direct deposit will be accepted.
If you wish to direct deposit into only one account or financial institution, use the appropriate line on your Form 1040.
Split-Refund Program
Paper Check
It is still possible to receive your income tax refund by paper check. It is the slowest way to receive your refund, and is less secure than direct deposit.
You can track the progress of your refund at Where's My Refund? or use IRS Publication 2043 - E-file Refund Cycle Chart to determine when you should receive your paper check.
Checking on Your Tax Refund
The IRS provides several means to check on your tax refund:
The IRS maintains a secure site, Where's My Refund?, for you to track the progress of your refund. You must know your SSN, Filing Status, and the exact amount of the refund in order to use this tool.
Payments
There are five methods you can use to make estimated tax payments to the Internal Revenue Service.
Electronic Federal Tax Payment System (EFTPS)
Paying by EFTPS is a fast and free way to make your estimated payments. Using EFTPS, you can input tax information over the phone and schedule payments up to 365 days in advance. EFTPS is the preferred method of making payments to the IRS. For more information on EFTPS, see http://www.eftps.gov.
Credit an Overpayment
If you have an overpayment of tax after completing your income tax return, you can apply all or part of the overpayment to estimated taxes for the current year. When applying an overpayment, the funds will be applied to payments in the order that avoids penalty for underpayment of estimated tax. If you choose to apply an overpayment to current year estimated tax, you cannot use the funds for any other reason. If all funds are not necessary to make estimated tax payments, the remainder will be refunded to you at the close of the year.
Check or Money Order
If you pay by check or money order, each payment must be accompanied by Form 1040-ES. After making the first quarter's estimated payment, or if you made estimated tax payments in the prior year, you will receive pre-printed Form 1040-ES's. Using the pre-printed forms when you make a payment will expedite the processing of your payments.
Electronic Funds Withdrawal
If you electronically file your tax return, you can schedule up to four estimated payments by electronic withdrawal. The funds can be withdrawn from a checking or savings account. In order to electronically file your return, the return must be prepared using a tax preparation program such as efile411.com to prepare your taxes online.
Pay by Credit Card
Estimated payments can also be made using your American Express, Discover, MasterCard ,or Visa. A convenience fee will be charged each time you use a credit card to make a payment.
IRS Tax Calendar
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Federal Holidays
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January 1
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New Year's Day
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January 19
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Birthday of Martin Luther King, Jr.
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January 20
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Inauguration Day
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February 16
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Washington's Birthday
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April 16
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District of Columbia Emancipation Day
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May 25
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Memorial Day
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July 3
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Independence Day
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September 7
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Labor Day
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October 12
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Columbus Day
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November 11
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Veterans' Day
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November 26
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Thanksgiving Day
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December 25
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Christmas Day
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E-File
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January 16
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First day to electronically file
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January 18
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First IRS acknowledgements of e-filed returns
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April 15
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Last day to e-file timely returns
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April 15
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Last day to e-file timely extension requests
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April 20
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Last day to retransmit rejected timely filed returns and extensions
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June 15
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Last day to e-file timely extension request for overseas taxpayers
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October 15
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Last day to e-file returns that received 6-month extension
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October 20
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Last day to retransmit rejected late or extension returns
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Individuals
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January 12
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Report tips of $20 or more to employer
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January 15
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Make last 2008 estimated tax payment
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February 10
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Report tips of $20 or more to employer
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March 10
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Report tips of $20 or more to employer
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April 10
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Report tips of $20 or more to employer
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April 15
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Due date to file calendar year 2008 tax returns or request an automatic 6-month extension of time to file. Pay any tax that is due, even if you file a 6-month extension of time to file.
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April 15
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First 2009 estimated tax payments due
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May 11
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Report tips of $20 or more to employer
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June 10
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Report tips of $20 or more to employer
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June 15
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Second 2009 estimated tax payments due
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July 10
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Report tips of $20 or more to employer
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August 10
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Report tips of $20 or more to employer
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September 10
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Report tips of $20 or more to employer
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September 15
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Third 2009 estimated tax payments due
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October 13
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Report tips of $20 or more to employer
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October 15
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Final due date to file calendar year 2008 tax returns for taxpayers who received a 6-month extension
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November 10
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Report tips of $20 or more to employer
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December 10
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Report tips of $20 or more to employer
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