1. Who must file?
- Income > The personal exemption + regular standard deduction
- Net self-employment income > $400
- Dependents who has unearned income, and gross income of $900 (20016) or more
- Individuls who received advance payment of earned income credit or health credit
2. When to file?
|Due Date||Type||6 Month Extension|
|Form 114||No Extension|
3. Choose your filing status
- Single: Single or legally seperated at years end
- Married Filing Jointly: You may choose this if you are married at years end of if one spouse dies during the year
- Married Filing Seperately: If a married couple decides to file their returns separately, each person’s filing status would generally be Married Filing Separately.
- Qualifying Widow(ER) with Dependant Child: For 2 years after spouse's death this status may apply if you have a dependent child and you meet certain other conditions.
- Head of Household: The Head of Household status generally applies if you are not married and have paid more than half the cost of maintaining a home for yourself and a qualifying person.
4. Individual Federal Taxation Equation
- State Tax Refund
- Alimony Received
- Business Income
- Capital Gain/Loss
- IRA Income
- Pension and Annuity
- Rental Income/Loss
- K-1 Income/Loss
- Unemployment Compensation
- Social Security Benefits
- Other Income
- Educator Expenses
- Student Loan Interest Expense
- Tuition & Fee Deduction
- Health Savings Account
- Moving Expenses
- One-Half Self-Employment FICA
- Self-Employed Health Insurance
- Self-Employed Retirement
- Interest Withdrawal Penalty
- Alimony Paid
- Medical(in excess of 7.5% pf AGI)
- Taxes - State/Local (Income/Sales & Property)
- Interest Expense - (Home & Investment)
- Charity (up to 50% of AGI)
- Casualty/Theft (in excess of 10% of AGI)
- Miscellaneous (in excess of 2% of AGI)
- Other Miscellaneous
5. Retirement Plan
|401K||ROTH IRA||TRADITIONAL IRA|
|If your employer offers||If you make less than 117K Single or 184K MFJ in 2016||Anyone|
Max Annual Contribution (under age 50)
Max Annual Contribution (age 50+)
Deadline for making contributions for current year
|Current year withdraw from paycheck||April 15 of the next year||April 15 of the next year|
Are your contributions tax deductable?
|Yes||No||Yes, depends on income, filing status or whether covered by an employer retirement plan|
Tax at withdraw
When can you withdraw?
|Age 59.5, required by 70.5||Started at age 59.5, no required age limit||Age 59.5, required by 70.5|
Early withdrawal Penalty?
|Minimum 10% penalty||No penalty for high medical bills, 10k towards a first home, higher eduction, disability, or die. Otherwise: 10% penalty||No penalty for high medical bills, 10k towards a first home, higher eduction, disability, or die. Otherwise: 10% penalty|
Report of Foreign Bank and Financial Accounts (FBAR - FinCEN Form 114)
Who must file?
- US citizens, US residents, trust, estates, and domestic entities that have a financial interst in or signture authority over foreign financial accounts, and the aggregate value of the foreign accounts exceeds $10,000 at any time during the calender year
- If your Child with over $10,000 in foreign accounts, a separate FBAR need to be filed for your child even if you declare the account on your Fbar as custodian
Form 8938: Statement of Specified Foreign Financial Asset. (Part of Form 1040)
Who must file?US citizens, resident aliens, and certain non-resident aliens that have an interest in specified foreign financial assets and meet the reporting threshold.
|Taxpayers living in the US||Taxpayers living outside the US|
|Total value of assets > $50,000 on the last day of the tax year||Total value of assets > $200,000 on the last day of the tax year|
|Total value of assets > $75,000 at any time during the year||Total value of assets > $300,000 at any time during the year|
|Total value of assets > $100,000 on the last day of the tax year||Total value of assets > $400,000 on the last day of the tax year|
|Total value of assets > $150,000 at any time during the year||Total value of assets > $600,000 at any time during the year|
FBAR vs Form 8938
Ways to Reduce your Income
- Choice the best filing status
- Save money for retirement, deferring compensation
- Save money for college fund
- Save money for health savings account
- Check if you qualify for the earned income tax credit
- Keep your mortgage longer
- Cash and Non cash charitable contributions
- Track medical expense
- Become more energy efficient to get energy credit
- Net capital loss can offset up to $ 3000/year Gains, carry forward
- Launch a business