It’s the time of year when U.S. citizens must begin planning to file their upcoming tax returns – and if you’re an expatriate living abroad, it can make the process more complicated than usual. Whether you’ve recently moved abroad or have been an expat for years, it is always beneficial to brush up on the tax return requirements leading into the upcoming tax season. Our team of seasoned expat tax lawyers is here to break down tax returns for expats: the minimum income to file taxes for all types of expats and special circumstances to consider.
How Much Do You Have To Make To File Taxes?
All Americans, including green card holders, who made a minimum of $12,550 in income, within the U.S. or outside of the U.S., are typically required to file a tax return. However, these requirements vary based on age and status of the filer:
If you are filing as a single person, or you are divorced or legally separated and no longer filing jointly with your partner, and are under the age of 65, your minimum income requirement for filing taxes is $12,550.
If you are filing as a single person and are over the age of 65, your minimum income requirement is increased, to $14,050.
Married, Filing Jointly
If you are married and choosing to file taxes with your spouse, you must combine both of your incomes to determine if you meet the minimum income to file taxes. If you are both under the age of 65, you must file taxes if your combined income is at least $24,800.
If one partner is over the age of 65 and one partner is under the age of 65, the minimum income is $26,100. If both partners are over the age of 65, the minimum income is $27,400.
Head of Household
To be classified as the head of household, you must be unmarried on the final day of the tax year for which you are filing, and pay more than half the cost of maintaining the house throughout the year, while living with a dependent for at least half the year. If you are the head of household and are under the age of 65, the minimum requirement is $18,650.
If you are head of the household and are over the age of 65, the minimum income requirement is $20,300.
Married, Filing Separately
If you are married but do not wish to file jointly, you can both file separately, similar to how a single person would file their taxes. If you are married and filing separately, the minimum income requirement is $5, at any age.
A qualifying widow/widower is a person who has lost their spouse and is still able to use the married filing jointly rates to determine their tax status for the year. The minimum income requirement for qualifying widows under the age of 65 is $24,800.
The minimum income requirement for a widow or widower over the age of 65 is $26,100.
What Are the Minimum Filing Requirements for Dependents?
If you are claimed as a dependent on someone else’s tax returns, but are still a working, adult dependent, you still may be required to file a tax return with the IRS. As with the tax requirements for non-dependents, the minimum income to file changes based on age and status.
When determining the income requirements for dependents, it is also important to take into account any unearned income, which is income not obtained by business or trade. This can be gift money, prize money, or interest on a savings account.
If you are single, filing individually and under the age of 65, your minimum income requirement is $12,400 earned or $1,100 unearned.
If you are filing individually and are over the age of 65 or blind, your income requirement is $14,050 earned or $2,750 unearned. If you are over the age of 65 and blind, your income requirement is $15,700 earned or $4,400 unearned.
If you are married and filing as a dependent under the age of 65, your minimum income requirement is $12,400 earned or $1,100 unearned. However, if your spouse is filing separately and itemizing deductions, you are required to file if your gross income is at least $5.
If you are over the age of 65 or blind and filing jointly, your income requirement is $14,050 earned or $2,750 unearned, or $5 if your spouse is filing separately. If you are over the age of 65 and blind, your income requirement is $15,700 earned or $4,400 unearned.
Even if your income doesn’t meet the above minimum requirements, you may still be required to file a tax return if you have any special circumstances. Special circumstances include:
- If you are self-employed. All self-employed individuals must file an income tax return if their income is a minimum of $400 throughout the year, no matter filing status or age of the filer.
- If you owe any taxes on a health savings account or a retirement plan, you are still required to file taxes even if your income is below the minimum requirements.
- If you owe an Alternative Minimum Tax.
- If you owe household employment taxes.
- If you owe Social Security or Medicare taxes on any unreported income.
- If you received distributions from a Health Savings Account.
These are not all the special circumstances in which you may still be required to file taxes, even if you don’t meet the minimum income. If you think you may be required to file due to a special circumstance, it is beneficial to speak to a seasoned international tax professional to determine your unique situation and filing requirements.
Why You Should Consider Filing Anyway
Even if you are not required to file your taxes during this tax year, it may be beneficial to file and potentially earn a refund in the upcoming year. If you do not file taxes, you are unable to earn any refund that may be owed to you. Some examples of refunds you may qualify for include the First Time Homebuyers credit, the Health Coverage Tax Credit, the American Opportunity Credit, and the Child Tax Credit. There are many other qualifiers that could ultimately provide you a tax refund in the coming year, and it is worth exploring the options and filing your taxes even if you are not required.
Do Expats Have To File a State Tax Return?
Some expats will continue being required to file a state tax return, even while living abroad. Many states will allow expats to discontinue any state taxes after they have proven they moved out of state and abroad, however some states such as Virginia, California and South Carolina, keep taxing expats who may still have ties to the state, such as property or voter registration. Speak with a professional about your state taxes if you are unsure whether or not you are required to file a tax return in your former state of residence.
How Evolution Tax and Legal Can Help With Your Expat Tax Return
Our team of dually-certified accountants and lawyers has the expertise needed to help you file your expat returns, and optimize your tax filing as much as possible to save you money. We are a team of seasoned international tax experts, who understand the intricacies and will use our expertise to find the tax solutions that will suit you. Contact the team to get started filing your expat tax return today.