Long-term American Expats In Los And Tax Returns

[greenwanderer108]

Okay, so all these years here, and considering eventually to do a DCF or any paperwork for that matter to migrate the missus and family back someday..., seems one of the biggies is showing filed tax returns...I remember someone saying its only if you made real money xxx...

Ooops,

not that I ever was making any real money here in Thailand but a quick google found these resources regarding the subject:

http://prague.tv/articles/business/taxation-tips-part2

and

http://www.globaltaxhelp.com/taxbasics.htm

...and they might as well have printed in Chinese, for the love of simplicity, I'm dumbfounded. Can someone either tell from there own bg/knowledge/experience or translate the above to laymen terms to answer the simple question.

Somewhere in there it says some limit of 8000 grand US annum which is some 260 k + in baht, works out to about 22kbaht per month. I think over the last several years of me just getting by enough to keep me in school for some of those years, and enough for me to keep food in my mouth and diapers on my son most recently, I made from teaching English and writing freelance, circa 300k (baht) per year over the last 5 years...never occcured to me to file any of it, being at the bottom of the 1st world food chain and all, and US domocile somewhere in the distant future.

Being that I haven't worked for 30-40 years dealing with IRS, I would never have suspected that I'd need to file any taxes while barely getting by in LOS, as I suspect many other younguns who may take the expat route from early age may be oblivous to the fact as well. So what are the facts?

Am I screwed? Do I owe money for not filing any of it, or maybe I will shut up for now and let someone with the proper bg/knowledge/understanding clear things up before I jump to any conclusions.

Thanks in advance

[lanny]

Basically, every US citizen or permanent resident (greencard holder) must file a tax return each year and report all worldwide income. There is an exception if your income is below certain levels; essentially the total of your personal exemptions and the standard deduction for your filing status. These amounts are indexed for inflation so they change every year but, for 2006 the limits were $8450 for single taxpayers and $16900 for married filing joint returns. There are more rules but this is the basic.

If you work for a living, you may be able to exclude up to $82400 (for 2006) from tax. You must report the income and claim the exclusion to do this. Unearned income, such as interest and dividends, rents, pensions, etc., may not be excluded, even if the source is outside the US. If you do not file and claim the exclusion, IRS may deny you the option if they contact you regarding your income for any year. In other words, you may lose the exclusion if you do not file and claim it.

The exclusion is for income tax purposes. If you are self-employed, you are still liable for the social security self-employment tax.

[greenwanderer108]

Thanks for briefing what the sources already said, but I need laymens terms... the limit is 8xxx $, ok I take this means if I've earned less than this in a year, I don't need to file? If I have made more (which all I might be able to show is a Thai bank statement/bankbook) than I should have filed but didn't cause didn't know, so am I screwed or is there a way to fix this and do a belated filing from here???

Actually, even though I did make average no more than 300k baht each year I've been here--or some 9,000 USD annum, even as a single guy in the first few years, I was a student so does that exempt me (most everything I made went towards tuition and living, no hope for saving anything those years) ? And for the last three years, I haven't been a student, but I haven't been single...not officially married but staying together and having a son together, doesn't that make me defacto married and thus exempt as a married couples limit is certainly higher than I've ever made?

The part about excluding 80XXX $ simply makes no sense to me? What the heck does this mean and how does it apply to me, if at all...? Again, I've not worked with the IRS for 30 years, so such ambiguous terminology about taxes and such aren't clear or familiar to me and surely many others who may be in my position now, or in the future.

Let's keep it simple for all American expats who decided to domocile in another country (at the bottom of the expat food chain) for 5+ years just barely getting by...as a student, as a father (or mother) exempt or not? If not, how to fix things? Surely I'm not the only American in LOS getting by on a peanut compensation and not considering that I might owe IRS, especially considering I was always getting taxed in LOS anyway, though it not amounting to any social benefits, etc.

Thanks again,

[tjo o tjim]

If you are a US citizen (or green card holder?), you have to file an annual tax return to report any income.

Lanny is right; you are off by a factor of 10 on income requirements.

What kills most expats is the fact that if you sell any stocks, they are assumed to be pure profit by the IRS unless you file a tax return to establish the cost basis. The IRS will track you down if they think your income was over a certain level, my guess is about $50k. It takes a couple years though.

Teaching English for what you made, and assuming no real income in interest, dividends, or stock sales, you would likely be fine.

One odd thing I found out was the state of California tried to come after me for not filing a return since I had a professional license from the state.

These things are generally easy enough to straighten out afterwards if you have to, but you don't want to owe the government any money or the penalties are miserable!

[ProThaiExpat]

Try to keep the overall picture. Chances are you did not make enough money to be required to file a tax return and that should be your position going in. It is the IRS responsibility to prove you made enough to file, in other words, the burden of proof is on them to prove your figures are not correct.

Their objective is to get you back on the tax roles and paying taxes. Thus they can be quite lenient in forgiving back taxes in such a situation, however, since your marginal at best, it is not worth their time to spend a lot of effort to prove you may owe a few dollars. They certainly can understand a citizen becoming an expat and never intending to return to the U.S.

There are tax attorneys who specialize in representing you before the IRS and getting massive amounts of owed tax forgiven when it appears there is no ability to pay. Guys coming off years of drug addiction are in this category.

H.R. Block and other tax preparers have all the knowledge to play the accounting game with what documents you may have to establish income over the years.

Certainly, if you go in with all the documents you have and declare that "that is all there is" and it accurately reflects what income you made, you should be all right. Who is to prove otherwise?

If you had an honest belief that you income was below the amount required for you to have to file, you off to a good start. Follow that up with documentation proving your right and you should be ok.

The IRS has published that 40 Million Americans file income tax returns that they don't have to. My CPA had me filing when I didn't have to. Of course, that was his business so!!!!

[CWMcMurray]

Will be finishing school after the new year and then will be working here in Thailand. I am married and have a daughter, do you know if ex-pats can claim the child tax credit? I have tried to research this and ther only documentation I can find says that the child must live with you in the US for a certain number of days per year. I am guessing that this is meant to stop people from claiming children living with family overseas being claimed but what if they live with me and we all live overseas?

Anyone have any ideas?

[thaihome]

Will be finishing school after the new year and then will be working here in Thailand. I am married and have a daughter, do you know if ex-pats can claim the child tax credit? I have tried to research this and ther only documentation I can find says that the child must live with you in the US for a certain number of days per year. I am guessing that this is meant to stop people from claiming children living with family overseas being claimed but what if they live with me and we all live overseas?

Anyone have any ideas?

It is unlikely that after the $80k foreign income exclusion and the virtually dollar for dollar foreign income tax credit for your Thai tax you will ever owe the IRS anything. This assumes you have no income based stocks, interest, or such.

You would have to be making well over $150k a year to owe any US tax.

Why would you need the child tax credit? If you are referring to claiming your child as a dependent, then you will need to get your child a SSN or TTN in order to claim them on the return. Same for your wife.

I claim both my wife and step daughter (neither are eligible for SSN) on return having got them TTN's some years ago.

TH

[TerryLH]

I think you are confused by the difference in the amounts that require you to file and actually owing money.

The $x,xxx amount is the filing amount. If you had income over that amount in the year you might be required to file.

The $8x,xxx is the amount you can exclude - not have to pay taxes on.

Contact the USA Embassy for a tax book, or get info and forms online. During the tax season the embassy has someone there to help people. Contact them for details.

If you only have simple earned income from Thailand, forms 1040 and 2555EZ need to be filled out. Both are very easy to do. As long as you made under 80k USD, you can exclude it all.

No need to worry about single/married filing status.

As noted by another poster, you should to get your child a US social security card. Ask the embassy about a US passport while you're at it. This assumes, of course, that you are a US citizen.

[Jingthing]

Greetings Yankee tax gurus.

Suppose you are well under the required to file income amount, but there are trackable events that make it look like you might be above that amount?

For example, you sold 30K in stocks but the taxable profit is only 5K. The IRS knows only that you sold 30K in stock. The only way it knows your taxable profit is much less is if you file.

IRS gurus, in such cases, should you file, or not?

OK, suppose the answer is do not file anyway because you are not required to in the above case.

Well, how is this for a paranoid thought (my speciality). Wouldn't it be wise to continue to file even if you don't need to to make it clear to the government that you still exist? I am particularly interested in whether you would fall off the map of the social security system if you didn't file for many years.

Edited October 17, 2007 by Jingthing

[otherstuff1957]

I don't mean to hijack this thread, but if you are an expat earning less than $80K with all of your income coming from overseas, what forms do you file with?

1040EZ and 2555EZ?

Or just 2555EZ?

[PeaceBlondie]

Are we overlooking one thing? What if the person has never filed since moving overseas, has worked overseas for more than a few years, and then wishes to claim the foreign earned income exclusion, to which he would normally be entitled? Aren't there rules about when that election has to be made, such as not being an election that can be made on a return which is both late and delinquent (with tax due)?

[TerryLH]

PB, I was hoping this thread would catch your attention.

I looked in my 2006 tax book and couldn't find the answer to the question you posed .

I think many of us assume (yes, I know) that if we exclude the income, we don't have to pay, if we don't have to pay, we shouldn't have to file.

What's the correct answer?

I'm just glad that my tax situation is as easy as it is.

Terry

"I don't mean to hijack this thread, but if you are an expat earning less than $80K with all of your income coming from overseas, what forms do you file with?"

It depends on where you mean by 'overseas'. Are you here, or there?

In my case, pension from US, salary from Thailand. Forms 1040 and 2555 EZ.

Hopefully PB will pop back in and give us some help.

Terry

Edited October 17, 2007 by TerryLH

[CWMcMurray]

Will be finishing school after the new year and then will be working here in Thailand. I am married and have a daughter, do you know if ex-pats can claim the child tax credit? I have tried to research this and ther only documentation I can find says that the child must live with you in the US for a certain number of days per year. I am guessing that this is meant to stop people from claiming children living with family overseas being claimed but what if they live with me and we all live overseas?

Anyone have any ideas?

It is unlikely that after the $80k foreign income exclusion and the virtually dollar for dollar foreign income tax credit for your Thai tax you will ever owe the IRS anything. This assumes you have no income based stocks, interest, or such.

You would have to be making well over $150k a year to owe any US tax.

Why would you need the child tax credit? If you are referring to claiming your child as a dependent, then you will need to get your child a SSN or TTN in order to claim them on the return. Same for your wife.

I claim both my wife and step daughter (neither are eligible for SSN) on return having got them TTN's some years ago.

TH

The reason I am interested in the child tax credit is because if my understanding is correct, if I don't owe taxes and I qualify for the tax credit then if I file I get a refund for the ammount of the child tax credit.

Is this the case?

[Tywais]

Are we overlooking one thing? What if the person has never filed since moving overseas, has worked overseas for more than a few years, and then wishes to claim the foreign earned income exclusion, to which he would normally be entitled? Aren't there rules about when that election has to be made, such as not being an election that can be made on a return which is both late and delinquent (with tax due)?

Need to download publication Pub. 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. It has more information about the bona fide residence test, the physical presence test and the foreign earned income exclusion. I filled the 2555 and my 1040 and my understanding is the 2555 needs to be filed before the exclusion can be used and needs filed only once after which you can retract the exclusion if desired later. Will not work on previous overseas income by filing the 2555 after the tax and payment period. I got caught on that and paid a bundle on my Thai income, paying both Thai taxes and US taxes on it by late filing the 2555.

[DurianChips]

Will be finishing school after the new year and then will be working here in Thailand. I am married and have a daughter, do you know if ex-pats can claim the child tax credit? I have tried to research this and ther only documentation I can find says that the child must live with you in the US for a certain number of days per year. I am guessing that this is meant to stop people from claiming children living with family overseas being claimed but what if they live with me and we all live overseas?

Anyone have any ideas?

It is unlikely that after the $80k foreign income exclusion and the virtually dollar for dollar foreign income tax credit for your Thai tax you will ever owe the IRS anything. This assumes you have no income based stocks, interest, or such.

You would have to be making well over $150k a year to owe any US tax.

Why would you need the child tax credit? If you are referring to claiming your child as a dependent, then you will need to get your child a SSN or TTN in order to claim them on the return. Same for your wife.

I claim both my wife and step daughter (neither are eligible for SSN) on return having got them TTN's some years ago.

TH

The reason I am interested in the child tax credit is because if my understanding is correct, if I don't owe taxes and I qualify for the tax credit then if I file I get a refund for the ammount of the child tax credit.

Is this the case?

Boy, I wish that were the case, but unfortunately it isn't. Tax credits count towards the tax you are required to pay, but you can only receive a credit up to the amount of the tax you actually owe. So no, the government won't pay you any extra money.

[PeaceBlondie]

Durian Chips, at least one major credit is refundable, the Earned Income Credit. Not sure about Child Credit, since that doesn't affect me now.

I raised the question about timely filing (or late filing a return on which tax is due) in order to claim the Foreign Earned Income Exclusion for the first time, because I know someone who almost lost his exclusion that way. Tywais is saying it's true, but I'm no expert on that. I recall the guy was filing two late returns and got good telephone advice from the special number in the USA for foreign issues. Like Social Security questions, the responders at the call centers are not fully trained on expatriate issues.

[lanny]

I see there is still considerable confusion about who needs to file, etc.

Basically, every US citizen or permanent resident (greencard holder) must file a return annually. Only those whose gross income is less than the prescribed amounts (see my earlier post to this thread) do not have to file. These limits apply to total gross income, so you have to use total proceeds from stock sales, total rental received, etc. to determine whether or not you have to file.

If you have enough income to require a return, you can exclude up to $82,400 from taxable income. You must report this income and use form 2555 to calculate the amount of exclusion. Mechanically, this means that you include the income on the return and then deduct the exclusion amount. However, you cannot use form 1040EZ if you want the exclusion -- form 1040EZ does not have a place for the exclusion and form 2555 cannot be part of such a return.

The rules for child tax credit require the child to live with the taxpayer in the US. This is not the same as living WITH the taxpayer overseas.

Unless you are legally married (have registered your marriage to a Thai spouse) you are a single taxpayer. You cannot file a joint return. Even if you are legally married, filing a joint return may not be your best option.

To claim a child as a dependent, that child must be a citizen or resident of the US, Canada, or Mexico. So, if you have a child with a Thai partner, you must register that child with the US embassy and obtain a social security number.

Finally, there are ways to claim the exclusion on late filed returns. This won't work if IRS contacts you about your income/tax for a given year but, if you come forward before they come after you, it is possible.

I have been preparing returns for many years, including some 7 years in Thailand. I can't recall a single year that I haven't had at least three or four people come to me to prepare returns for several prior years. The requirement to file doesn't go away just because you missed the deadline!

[greenwanderer108]

To be honest, I'm not worried about not gaining a US pension someday or claiming any returns that should have been mine from work that was done stateside years ago (they got my taxes for time I was there, hopefully the dollars went to something good, while others who filed may have got returns from presidential elections or whatever, good for them, I'm indifferent)

Okay okay...my son is registered as a US citizen with both American and Thai passport. I have procrastinated sending off the Social Security packet application to Manila until it was closer time to him going to the USA as I previously saw no other purpose of having a SS # living in Thailand with USA years away...but sounds like I ought to send it off sooner than later if I got to worry about taxes..

Which really, if it's on the burden of IRS to prove I made so much money living here in LOS, I say let them waste their time trying to.. but seriously, being in Thailand, as a student who really is at border line if at all on the 8k per year of income (being that the baht-dollar rate has dropped so much I make more US dollars now than I did two+ years ago). Do I really need to contact the IRS and make late filing? Lets be reasonable, I have made average of 400 - 600 dollars per month my time here, most which either gone to University or my son most recently.

Yes I can prove that I've been a student in Thailand and will continue to be so likely come January for the next 2 - 3 years. Do I really need to file for the years in school prior and the upcoming years to come. I've read (here) that it is possible in the visa process where the tax returns are required, that without a tax return transcripts for the affidavits, etc. it is possible instead to attach a letter explaining why one didn't file taxes (inadequate income or student status, etc.), particularly if one is using a sponsor for the visa (which I will likely need to)

so is it safe for me to go along this route and not worry about taxes...what are the chances it's really gonna bite me in the butt?

I HAVE No assets, stocks, or any of such luxuries... Even counting what peanuts I could pull in to be able to breath here in LOS, I'm WELL below the US poverty standard line. Considering all this, is someone going to still strongly advise that I do belated filings and/or begin to file from here on only or ???

[Jingthing]

Lanny,

If you get the chance, could you answer my previous question? Thanks!

Suppose you are well under the required to file income amount, but there are trackable events that make it look like you might be above that amount?

For example, you sold 30K in stocks (from a US based account) but the taxable profit is only 5K. The IRS knows only that you sold 30K in stock. The only way it knows your taxable profit is much less is if you file.

IRS gurus, in such cases, should you file, or not?

[tutsiwarrior]

I see there is still considerable confusion about who needs to file, etc.

Basically, every US citizen or permanent resident (greencard holder) must file a return annually. Only those whose gross income is less than the prescribed amounts (see my earlier post to this thread) do not have to file. These limits apply to total gross income, so you have to use total proceeds from stock sales, total rental received, etc. to determine whether or not you have to file.

If you have enough income to require a return, you can exclude up to $82,400 from taxable income. You must report this income and use form 2555 to calculate the amount of exclusion. Mechanically, this means that you include the income on the return and then deduct the exclusion amount. However, you cannot use form 1040EZ if you want the exclusion -- form 1040EZ does not have a place for the exclusion and form 2555 cannot be part of such a return.

The rules for child tax credit require the child to live with the taxpayer in the US. This is not the same as living WITH the taxpayer overseas.

Unless you are legally married (have registered your marriage to a Thai spouse) you are a single taxpayer. You cannot file a joint return. Even if you are legally married, filing a joint return may not be your best option.

To claim a child as a dependent, that child must be a citizen or resident of the US, Canada, or Mexico. So, if you have a child with a Thai partner, you must register that child with the US embassy and obtain a social security number.

Finally, there are ways to claim the exclusion on late filed returns. This won't work if IRS contacts you about your income/tax for a given year but, if you come forward before they come after you, it is possible.

I have been preparing returns for many years, including some 7 years in Thailand. I can't recall a single year that I haven't had at least three or four people come to me to prepare returns for several prior years. The requirement to file doesn't go away just because you missed the deadline!

so, are you saying that if a return is not filed for a given tax year and if the return is then filed late in reply to a query from the IRS the taxpayer shall not be entitled to the USD82,400.00 overseas income exclusion?

Edited October 18, 2007 by tutsiwarrior

[Tywais]

so, are you saying that if a return is not filed for a given tax year and if the return is then filed late in reply to a query from the IRS the taxpayer shall not be entitled to the USD82,400.00 overseas income exclusion?

That is how it happened to me. They contacted me regarding late filing, in my case very late, and was not allowed the exclusion.

[lanny]

To answer Jingtin and Tutsuwarrior:

In determining whether there is enough income to require filing a return, you must look to total GROSS income. That means that you count the total proceeds from stock sales, not the gain or loss. IRS know what your broker sold your stock for, they don't know what you paid for the stock. So, in the example given, the gross income is the $30000, not the $5000 and, as a result, a return is required.

What happens if you don't file? IRS will see the $30000 and assess tax based on that amount being a short-term gain. Under the code, if you don't file, IRS is authorized to file for you based on any information they may have. In that case, their return is presumed to be correct and the burden of proof is on you, the taxpayer, to prove them wrong. If you don't file, the burder of proof is on you, not the IRS.

Also, if IRS files a substitute for return, that becomes the original return, without the foreign exclusion, and you would no longer have the option to elect the exclusion.

You should understand that the exclusion is neither automatic nor required. Claiming the exclusion is an election you make by filing Form 2555. But, it is optional.

[TerryLH]

"The rules for child tax credit require the child to live with the taxpayer in the US. This is not the same as living WITH the taxpayer overseas."

Lanny, I'm afraid that I have to disagree with you about this. I'm normally very stupid about tax stuff, but I have a child so looked into this some years ago.

After just reading my 2006 tax book again, I think you are confusing the Child Tax Credit and the Earned Income Credit.

The Child Tax Credit does not require the child to live with you in the USA. Any credit you might get from this reduces the amount you owe. If you don't owe anything, no credit because nothing to reduce.

The Earned Income Credit (EIC) does require USA residency and if qualified can get you money back, even if you don't owe anything.

I've been using the Child Tax Credit for a number of years with no problems, and haven't lived in the USA in all of that time.

Terry

[taxout]

The statute of limitations for Federal tax purposes doesn't begin to run until you've filed a return.

So if there's any question at all whether you need to file a return, the safest approach is always to file and start the statute of limitations running.

Note too that the earned income exclusion does not affect your obligation for social security taxes; if you're self-employed in Thailand you'll owe self-employment tax at the same rates as if you were self-employed in the US. (You don't pay social security tax if you're employed by a Thai employer.)

If you're looking down the road, remember as well that benefits generally aren't payable under Social Security or Medicare until you've paid Social Security taxes for at least 40 quarters -- ten years -- and that's an aggregrated, not necessarily continuous, period.

Edited October 20, 2007 by taxout

[Heng]

Here's a hint Green, most overseas Thais I know open offshore accounts with their Thai passports, not their US passports (they usually just consider it a convenient travel pass).

[SHDWFX]

Very good info on this thread. Thanks all. Perhaps you could consider this situation:

-- Living in LOS over ten years, first eight years with no documented income

-- Have not filed US taxes since 1996

-- Owe a bundle (over$100k) on taxes from the early 90s

-- Now legit here in LOS (work permit, steady non-TOEFL job, etc.)

-- Do not plan to go back to US for the foreseeable future

I certainly do not make over $80k so according to the info in this thread, it looks like I would not have to pay anything if I filed. Given the above why should I start filing now? Would it be to my advantage to file just to show "good faith" or something in case I ever do go back to the US and then have to work? I would prefer to be completely off the radar screen. But then, you never really know...

[Gumballl]

I suggest you file, regardless of your hopes to remain off the radar. If the IRS ever decides to pursue a case against you, the first thing that will probably happen is that your US passport will be confiscated by the Dept of State.

Greenwanderer108 - The same advice applies to you. File your taxes using the 1040EZ. If you owe nothing, then great; if you do, then consider using the regular 1040 and the 2555 to reduce your tax liability. If you want to claim your child, then he/she must have an SSN. Btw, your personal expenses (for family, education, etc) are of no concern to the IRS; they only care about how must money you earned, and then any adjustments that you claim to derive an "adjusted gross income".

[BPayette]

Thanks for briefing what the sources already said, but I need laymens terms... the limit is 8xxx $, ok I take this means if I've earned less than this in a year, I don't need to file? If I have made more (which all I might be able to show is a Thai bank statement/bankbook) than I should have filed but didn't cause didn't know, so am I screwed or is there a way to fix this and do a belated filing from here???

Actually, even though I did make average no more than 300k baht each year I've been here--or some 9,000 USD annum, even as a single guy in the first few years, I was a student so does that exempt me (most everything I made went towards tuition and living, no hope for saving anything those years) ? And for the last three years, I haven't been a student, but I haven't been single...not officially married but staying together and having a son together, doesn't that make me defacto married and thus exempt as a married couples limit is certainly higher than I've ever made?

The part about excluding 80XXX $ simply makes no sense to me? What the heck does this mean and how does it apply to me, if at all...? Again, I've not worked with the IRS for 30 years, so such ambiguous terminology about taxes and such aren't clear or familiar to me and surely many others who may be in my position now, or in the future.

Let's keep it simple for all American expats who decided to domocile in another country (at the bottom of the expat food chain) for 5+ years just barely getting by...as a student, as a father (or mother) exempt or not? If not, how to fix things? Surely I'm not the only American in LOS getting by on a peanut compensation and not considering that I might owe IRS, especially considering I was always getting taxed in LOS anyway, though it not amounting to any social benefits, etc.

Thanks again,

Buy Turbotax deluxe, I've been using it for years, and it takes care of all this stuff for you.

You can buy it online and download it...don't think Pantip carries this.

[BPayette]

Try to keep the overall picture. Chances are you did not make enough money to be required to file a tax return and that should be your position going in. It is the IRS responsibility to prove you made enough to file, in other words, the burden of proof is on them to prove your figures are not correct.

Their objective is to get you back on the tax roles and paying taxes. Thus they can be quite lenient in forgiving back taxes in such a situation, however, since your marginal at best, it is not worth their time to spend a lot of effort to prove you may owe a few dollars. They certainly can understand a citizen becoming an expat and never intending to return to the U.S.

There are tax attorneys who specialize in representing you before the IRS and getting massive amounts of owed tax forgiven when it appears there is no ability to pay. Guys coming off years of drug addiction are in this category.

H.R. Block and other tax preparers have all the knowledge to play the accounting game with what documents you may have to establish income over the years.

Certainly, if you go in with all the documents you have and declare that "that is all there is" and it accurately reflects what income you made, you should be all right. Who is to prove otherwise?

If you had an honest belief that you income was below the amount required for you to have to file, you off to a good start. Follow that up with documentation proving your right and you should be ok.

The IRS has published that 40 Million Americans file income tax returns that they don't have to. My CPA had me filing when I didn't have to. Of course, that was his business so!!!!

I do NOT believe this is correct! I believe every US citizen needs to file a tax return, regardless of the amount of income.

You won't have to pay anything, but you need to file a return, at least the Fed return (not sure about each state) every year.

[JaiGuru]

I do NOT believe this is correct! I believe every US citizen needs to file a tax return, regardless of the amount of income.

Without regard to what you believe, IRS Publication 501, page 2, addresses this clearly and distinctly; a US citizen or resident alien must file a federal income tax return if their gross income is over a certain amount.

Check the publication for the right amounts, but this is what I got…

Filing single under 65 - $8,450

Filing single 65 or older - $9,700

Filing head of household under 65 – $10,850

Filing head of household 65 or older – $12,100

Married, filing jointly (under 65 both spouses) – $16,900

Married, filing jointly (65 or older one spouse) – $17,900

Married, filing jointly (65 or older both spouses) – $18,900

Married filing separately (any age) $3,300

Qualifying widow(er) with dependent child (under 65) - $13,600

Qualifying widow(er) with dependent child (65 or older) - $14,600