IRS Publication 17, Chapter 1, Filing Information

What's New

Who must file. Generally, the amount of income you can receive before you must file a return has been increased. See Table 1-1, Table 1-2, and Table 1-3 for the specific amounts.

Higher taxable income limits for filing Form 1040A, 1040EZ, and TeleFile. Beginning with the 2004 tax return, you can use Form 1040A, Form 1040EZ, and TeleFile if your taxable income is less than $100,000. Previously, the limit was taxable income of less than $50,000.

Mailing your return. You may be mailing your return to a different address this year because the IRS has changed the filing location for several areas. If you received an envelope with your tax package, please use it. Otherwise, see Where Do I File, later in this chapter.

Reminders

Alternative filing methods. Rather than filing a return on paper, you may be able to file electronically using IRS e-file. Create your own personal identification number (PIN) and file a completely paperless tax return. For more information, see Does My Return Have To Be on Paper, later.

Change of address. If you change your address, you should notify the IRS. See Change of Address, later, under What Happens After I File.

Write in your social security number. You must write your social security number (SSN) in the spaces provided on your tax return. If you file a joint return, write the SSNs in the same order as the names.

Direct deposit of refund. Instead of getting a paper check, you may be able to have your refund deposited directly into your account at a bank or other financial institution. See Direct Deposit under Refunds, later.

Alternative payment methods. If you owe additional tax, you may be able to pay electronically. See How To Pay, later.

Installment agreement. If you cannot pay the full amount due with your return, you may ask to make monthly installment payments. See Installment Agreement, later, under Amount You Owe.

Service in combat zone. You are allowed extra time to take care of your tax matters if you are a member of the Armed Forces who served in a combat zone, or if you served in the combat zone in support of the Armed Forces. See Individuals Serving in Combat Zone, later, under When Do I Have To File.

Adoption taxpayer identification number. If a child has been placed in your home for purposes of legal adoption and you will not be able to get a social security number for the child in time to file your return, you may be able to get an adoption taxpayer identification number (ATIN). For more information, see Social Security Number, later.

Taxpayer identification number for aliens. If you or your dependent is a nonresident or resident alien who does not have and is not eligible to get a social security number, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. For more information, see Social Security Number, later.

Third party designee. You can allow the IRS to discuss your tax return with a friend, family member, or any other person you choose by checking the “Yes” box in the Third party designee area of your return. For more information, see Third Party Designee, later.

Introduction

This chapter discusses:

Whether you have to file a return,
Which form to use,
How to file electronically,
When, how, and where to file your return,
What happens if you pay too little or too much tax,
What records you should keep and how long you should keep them, and
How you can change a return you have already filed.

Do I Have To File a Return?

You must file a federal income tax return if you are a citizen or resident of the United States or a resident of Puerto Rico and you meet the filing requirements for any of the following categories that apply to you.

Individuals in general. (There are special rules for surviving spouses, executors, administrators, legal representatives, U.S. citizens and residents living outside the United States, residents of Puerto Rico, and individuals with income from U.S. possessions.)
Dependents.
Children under age 14.
Self-employed persons.
Aliens.

The filing requirements for each category are explained in this chapter.

The filing requirements apply even if you do not owe tax.

Even if you do not have to file a return, it may be to your advantage to do so. See Who Should File , later.

File only one federal income tax return for the year regardless of how many jobs you had, how many Forms W-2 you received, or how many states you lived in during the year.

Individuals—In General

If you are a U.S. citizen or resident, whether you must file a return depends on three factors:

Your gross income,
Your filing status, and
Your age.

To find out whether you must file, see Table 1-1, Table 1-2, and Table 1-3. Even if no table shows that you must file, you may need to file to get money back. (See Who Should File, later.)

Gross income. This includes all income you receive in the form of money, goods, property, and services that is not exempt from tax. It also includes income from sources outside the United States (even if you may exclude all or part of it). Common types of income are discussed in Part Two of this publication.

Community income. If you are married and your permanent home is in a community property state, half of any income described by state law as community income may be considered yours. This affects your federal taxes, including whether you must file if you do not file a joint return with your spouse. See Publication 555, Community Property, for more information.

Self-employed individuals. If you are self-employed, your gross income includes the amount on line 7 of Schedule C (Form 1040), Profit or Loss From Business, line 1 of Schedule C-EZ (Form 1040), Net Profit From Business, and line 11 of Schedule F (Form 1040), Profit or Loss From Farming. See Self-Employed Persons, later, for more information about your filing requirements.

If you do not report all of your self-employment income, your social security benefits may be lower when you retire.

Filing status. Your filing status depends on whether you are single or married and on your family situation. Your filing status is determined on the last day of your tax year, which is December 31 for most taxpayers. See chapter 2 for an explanation of each filing status.

Age. If you are 65 or older at the end of the year, you generally can have a higher amount of gross income than other taxpayers before you must file. See Table 1-1. You are considered 65 on the day before your 65th birthday. For example, if your 65th birthday is on January 1, 2005, you are considered 65 for 2004.

Table 1-1.2004 Filing Requirements for Most Taxpayers

IF your filing status is...	AND at the end of 2004 you were...*	THEN file a return if your gross income was at least...**
single	under 65	$7,950
	65 or older	$9,150
married filing jointly***	under 65 (both spouses)	$15,900
	65 or older (one spouse)	$16,850
	65 or older (both spouses)	$17,800
married filing separately	any age	$3,100
head of household	under 65	$10,250
	65 or older	$11,450
qualifying widow(er) with	under 65	$12,800
dependent child	65 or older	$13,750

*	If you were born on January 1, 1940, you are considered to be age 65 at the end of 2004.
**	Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States (even if you may exclude part or all of it). Do not include social security benefits as gross income unless you are married filing a separate return and you lived with your spouse at any time during 2004.
***	If you did not live with your spouse at the end of 2004 (or on the date your spouse died) and your gross income was at least $3,100, you must file a return regardless of your age.

Surviving Spouses, Executors, Administrators, and Legal Representatives

You must file a final return for a decedent (a person who died) if both of the following are true.

You are the surviving spouse, executor, administrator, or legal representative.
The decedent met the filing requirements at the date of death.

For more information on rules for filing a decedent's final return, see chapter 4.

U.S. Citizens and Residents Living Outside the United States

If you are a U.S. citizen or resident living outside the United States, you must file a return if you meet the filing requirements. For information on special tax rules that may apply to you, get Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. It is available at most U.S. embassies and consulates. Also see How To Get Tax Help in the back of this publication.

Residents of Puerto Rico

Generally, if you are a U.S. citizen and a resident of Puerto Rico, you must file a U.S. income tax return if you meet the filing requirements. This is in addition to any legal requirement you may have to file an income tax return for Puerto Rico.

If you are a resident of Puerto Rico for the entire year, gross income does not include income from sources within Puerto Rico, except for amounts received as an employee of the United States or a U.S. agency. If you receive income from Puerto Rican sources that is not subject to U.S. tax, you must reduce your standard deduction. As a result, the amount of income you must have before you are required to file a U.S. income tax return is lower than the applicable amount in Table 1-1 or Table 1-2. For more information, see U.S. taxation and its discussion, Standard deduction, under The Commonwealth of Puerto Rico in Publication 570, Tax Guide for Individuals With Income From U.S. Possessions.

Individuals With Income From U.S. Possessions

If you had income from Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, or the Virgin Islands, special rules may apply when determining whether you must file a U.S. federal income tax return. In addition, you may have to file a return with the individual island government. See Publication 570 for more information.

Dependents

If you are a dependent (one who meets the dependency tests in chapter 3), see Table 1-2 to find whether you must file a return. You also must file if your situation is described in Table 1-3.

Responsibility of parent. Generally, a child is responsible for filing his or her own tax return and for paying any tax on the return. But if a dependent child who must file an income tax return cannot file it for any reason, such as age, then a parent, guardian, or other legally responsible person must file it for the child. If the child cannot sign the return, the parent or guardian must sign the child's name followed by the words “By (your signature), parent for minor child.”

Child's earnings. Amounts a child earns by performing services are his or her gross income. This is true even if under local law the child's parents have the right to the earnings and may actually have received them. If the child does not pay the tax due on this income, the parent is liable for the tax.

Children Under Age 14

If a child's only income is interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends) and certain other conditions are met, a parent can elect to include the child's income on the parent's return. If this election is made, the child does not have to file a return. See Parent's Election To Report Child's Interest and Dividends in chapter 33.

Self-Employed Persons

You are self-employed if you:

Carry on a trade or business as a sole proprietor,
Are an independent contractor,
Are a member of a partnership, or
Are in business for yourself in any other way.

Self-employment can include work in addition to your regular full-time business activities, such as certain part-time work you do at home or in addition to your regular job.

You must file a return if your gross income is at least as much as the filing requirement amount for your filing status and age (shown in Table 1-1). Also, you must file Form 1040 and Schedule SE (Form 1040), Self-Employment Tax, if:

Your net earnings from self-employment (excluding church employee income) were $400 or more, or
You had church employee income of $108.28 or more. (See Table 1-3.)

Use Schedule SE (Form 1040) to figure your self-employment tax. Self-employment tax is comparable to the social security and Medicare tax withheld from an employee's wages. For more information about this tax, get Publication 533, Self-Employment Tax.

Employees of foreign governments or international organizations. If you are a U.S. citizen who works in the United States for an international organization, a foreign government, or a wholly owned instrumentality of a foreign government, and your employer is not required to withhold social security and Medicare taxes from your wages, you must include your earnings from services performed in the United States when figuring your net earnings from self-employment.

Ministers. You must include income from services you performed as a minister when figuring your net earnings from self-employment, unless you have an exemption from self-employment tax. This also applies to Christian Science practitioners and members of a religious order who have not taken a vow of poverty. For more information, get Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers.

Table 1-2. 2004 Filing Requirements for Dependents

See chapter 3 to find out if someone can claim you as a dependent.

If your parents (or someone else) can claim you as a dependent, and any of the situations below apply to you, you must file a return. (See Table 1-3 for other situations when you must file.)
In this table, earned income includes salaries, wages, tips, and professional fees. It also includes taxable scholarship and fellowship grants. (See Scholarship and Fellowship Grants in chapter 13.) Unearned income includes investment-type income such as 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. Gross income is the total of your earned and unearned income.
Caution: If your gross income was $3,100 or more, you generally cannot be claimed as a dependent unless you were under age 19 or a full-time student under age 24. For details, see Gross Income Test in chapter 3.
Single dependents—Were you either age 65 or older or blind?
□	No.	You must file a return if any of the following apply.
		•	Your unearned income was more than $800.
		•	Your earned income was more than $4,850.
		•	Your gross income was more than the larger of:
			•	$800, or
			•	Your earned income (up to $4,600) plus $250.
□	Yes.	You must file a return if any of the following apply.
		•	Your unearned income was more than $2,000 ($3,200 if 65 or older and blind).
		•	Your earned income was more than $6,050 ($7,250 if 65 or older and blind).
		•	Your gross income was more than $1,200 ($2,400 if 65 or older and blind) plus the larger of:
			•	$800, or
			•	Your earned income (up to $4,600) plus $250.
Married dependents—Were you either age 65 or older or blind?
□	No.	You must file a return if any of the following apply.
		•	Your unearned income was more than $800.
		•	Your earned income was more than $4,850.
		•	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:
			•	$800, or
			•	Your earned income (up to $4,600) plus $250.
□	Yes.	You must file a return if any of the following apply.
		•	Your unearned income was more than $1,750 ($2,700 if 65 or older and blind).
		•	Your earned income was more than $5,800 ($6,750 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 $950 ($1,900 if 65 or older and blind) plus the larger of:
			•	$800, or
			•	Your earned income (up to $4,600) plus $250.

Aliens

Your status as an alien—resident, nonresident, or dual-status—determines whether and how you must file an income tax return.

The rules used to determine your alien status are discussed in Publication 519, U.S. Tax Guide for Aliens.

Resident alien. If you are a resident alien for the entire year, you must file a tax return following the same rules that apply to U.S. citizens. Use the forms discussed in this publication.

Nonresident alien. If you are a nonresident alien, the rules and tax forms that apply to you are different from those that apply to U.S. citizens and resident aliens. See Publication 519 to find out if U.S. income tax laws apply to you and which forms you should file.

Dual-status taxpayer. If you are a resident alien for part of the tax year and a nonresident alien for the rest of the year, you are a dual-status taxpayer. Different rules apply for each part of the year. For information on dual-status taxpayers, see Publication 519.

Who Should File

Even if you do not have to file, you should file a federal income tax return to get money back if any of the following conditions apply.

You had federal income tax withheld from your pay.
You qualify for the earned income credit. See chapter 38 for more information.
You qualify for the additional child tax credit. See chapter 36 for more information.
You qualify for the health coverage tax credit. See chapter 39 for more information.

Which Form Should I Use?

You must use one of three forms to file your return: Form 1040EZ, Form 1040A, or Form 1040. (But also see Does My Return Have To Be on Paper, later.)

Form 1040EZ

Form 1040EZ is the simplest form to use.

You can use Form 1040EZ if all of the following apply.

Your filing status is single or married filing jointly. If you were a nonresident alien at any time in 2004, your filing status must be married filing jointly.
You (and your spouse if married filing a joint return) were under age 65 and not blind at the end of 2004. If you were born on January 1, 1940, you are considered to be age 65 at the end of 2004.
You do not claim any dependents.
Your taxable income is less than $100,000.
Your income is only from wages, salaries, tips, unemployment compensation, Alaska Permanent Fund dividends, taxable scholarship and fellowship grants, and taxable interest of $1,500 or less.
You did not receive any advance earned income credit (EIC) payments.
You do not claim any adjustments to income, such as a deduction for IRA contributions or student loan interest.
You do not claim any credits other than the earned income credit.
You do not owe any household employment taxes on wages you paid to a household employee.

You must meet all of these requirements to use Form 1040EZ. If you do not, you must use Form 1040A or Form 1040.

Figuring tax. On Form 1040EZ, you can use only the tax table to figure your tax. You cannot use Form 1040EZ to report any other tax.

Form 1040A

If you do not qualify to use Form 1040EZ, you may be able to use Form 1040A.

You can use Form 1040A if all of the following apply.

Your income is only from wages, salaries, tips, IRA distributions, pensions and annuities, taxable social security and railroad retirement benefits, taxable scholarship and fellowship grants, interest, ordinary dividends (including Alaska Permanent Fund dividends), capital gain distributions, and unemployment compensation.
Your taxable income is less than $100,000.
Your adjustments to income are for only the following items.
1. Educator expenses.
2. IRA deduction.
3. Student loan interest deduction.
4. Tuition and fees deduction.
You do not itemize your deductions.
Your taxes are from only the following items.
1. Tax Table.
2. Alternative minimum tax. (See chapter 32.)
3. Advance earned income credit (EIC) payments, if you received any. (See chapter 38.)
4. Recapture of an education credit. (See chapter 37.)
5. Form 8615, Tax for Children Under Age 14 With Investment Income of More Than $1,600.
6. Qualified Dividends and Capital Gain Tax Worksheet.
You claim only the following tax credits.
1. The credit for child and dependent care expenses. (See chapter 34.)
2. The credit for the elderly or the disabled. (See chapter 35.)
3. The child tax credit. (See chapter 36.)
4. The additional child tax credit. (See chapter 36.)
5. The education credits. (See chapter 37.)
6. The retirement savings contributions credit. (See chapter 39.)
7. The earned income credit. (See chapter 38.)
8. The adoption credit. (See chapter 39.)
You did not have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option. (See Publication 525, Taxable and Nontaxable Income.)

You must meet all of the above requirements to use Form 1040A. If you do not, you must use Form 1040.

If you meet the above requirements, you can use Form 1040A even if you received employer-provided adoption benefits or dependent care benefits.

If you receive a capital gain distribution that includes unrecaptured section 1250 gain, section 1202 gain, or collectibles (28%) gain, you cannot use Form 1040A. You must use Form 1040.

Form 1040

If you cannot use Form 1040EZ or Form 1040A, you must use Form 1040. You can use Form 1040 to report all types of income, deductions, and credits.

You may have received Form 1040A or Form 1040EZ in the mail because of the return you filed last year. If your situation has changed this year, it may be to your advantage to file Form 1040 instead. You may pay less tax by filing Form 1040 because you can take itemized deductions, some adjustments to income, and credits you cannot take on Form 1040A or Form 1040EZ.

You must use Form 1040 if any of the following apply.

Your taxable income is $100,000 or more.
You itemize your deductions.
You had income that cannot be reported on Form 1040EZ or Form 1040A, including tax-exempt interest from private activity bonds issued after August 7, 1986.
You claim any adjustments to gross income other than the adjustments listed earlier under Form 1040A.
Your Form W-2, box 12, shows uncollected employee tax (social security and Medicare tax) on tips (see chapter 7) or group-term life insurance (see chapter 6).
You received $20 or more in tips in any one month and did not report all of them to your employer. (See chapter 7.)
You claim any credits other than the credits listed earlier under Form 1040A.
You owe the excise tax on insider stock compensation from an expatriated corporation.
You have to file other forms with your return to report certain exclusions, taxes, or transactions.

Table 1-3.Other Situations When You Must File a 2004 Return

If any of the four conditions listed below apply, you must file a return, even if your income is less than the amount shown in Table 1-1 or Table 1-2.
1.	You owe any special taxes, such as:
	• • • • • • • • • • • • •	Social security or Medicare tax on tips you did not report to your employer. (See chapter 7.) Uncollected social security, Medicare, or railroad retirement tax on tips you reported to your employer. (See chapter 7.) Uncollected social security, Medicare, or railroad retirement tax on your group-term life insurance. This amount should be shown in box 12 of your Form W-2. Alternative minimum tax. (See chapter 32.) Additional tax on a qualified retirement plan, including an individual retirement arrangement (IRA). (See chapter 18.) Additional tax on an Archer MSA or health savings account. (See Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.) Additional tax on a Coverdell ESA or qualified tuition program. (See Publication 970, Tax Benefits for Education.) Recapture of an investment credit or a low-income housing credit. (See the instructions for Form 4255, Recapture of Investment Credit, or Form 8611, Recapture of Low-Income Housing Credit.) Recapture tax on the disposition of a home purchased with a federally-subsidized mortgage. (See chapter 16.) Recapture of the qualified electric vehicle credit. (See chapter 39.) Recapture of an education credit. (See chapter 37.) Recapture of the Indian employment credit. (See the instructions for Form 8845, Indian Employment Credit.) Recapture of the new markets credit. (See Form 8874, New Markets Credit.)
2.	You received any advance earned income credit (EIC) payments from your employer. This amount should be shown in box 9 of your Form W-2. (See chapter 38.)
3.	You had net earnings from self-employment of at least $400. (See Self-Employed Persons earlier in this chapter.)
4.	You had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes. (See Publication 533.)

Does My Return Have To Be on Paper?

You may be able to file a paperless return using IRS e-file (electronic filing). It's so easy, over 61 million taxpayers preferred e-file over filing a paper tax return last year.

This section explains how to e-file:

Using an Authorized IRS e-file Provider,
Using your personal computer, or
Using a telephone (TeleFile).

IRS e-file

Please click here for the text description of the image.

E-file logo

Table 1-4 lists the benefits of IRS e-file. IRS e-file uses automation to replace most of the manual steps needed to process paper returns. As a result, the processing of e-file returns is faster and more accurate than the processing of paper returns. However, as with a paper return, you are responsible for making sure your return contains accurate information and is filed on time.

Using e-file does not affect your chances of an IRS examination of your return.

Electronic signatures. Create your own personal identification number (PIN) and use a tax professional or file your own paperless return electronically. If you are married filing jointly, you and your spouse will each need to create a PIN and enter these PINs as your electronic signatures.

A PIN is any combination of five numbers, except five zeros. If you use a PIN, there is nothing to sign and nothing to mail—not even your Forms W-2.

To verify your identity, you will be asked to enter your adjusted gross income (AGI) from your originally filed 2003 income tax return, if applicable. Do not use your AGI from an amended return (Form 1040X), math error notice, or other changed amount from the IRS. AGI is the amount shown on your 2003 Form 1040, line 34; Form 1040A, line 21; Form 1040EZ, line 4; and on the TeleFile Tax Record, line I. If you do not have your 2003 income tax return, call the IRS at 1-800-829-1040 to get a free transcript of your account. You will also be asked to enter your date of birth (DOB). Make sure your DOB is accurate and matches the information on record with the Social Security Administration by checking your annual Social Security Statement.

Table 1-4.Benefits of IRS e-file

Free File Options!	•	At least 60 percent of taxpayers are eligible to use free commercial online tax preparation software to e-file.
	•	Visit www.irs.gov/efile to see if you qualify and to access these free services offered by the tax software industry (not the IRS).
Fast! Easy! Convenient!	•	Get your refund in half the time as paper filers do, even faster and safer with Direct Deposit—in as few as 10 days.
	•	Sign electronically and file a completely paperless return.
	•	Receive an electronic proof of receipt within 48 hours that the IRS received your return.
	•	If you owe, you can e-file and authorize an electronic funds withdrawal or pay by credit card. If you e-file before April 15, 2005, you can schedule an electronic funds withdrawal from your checking or savings account as late as April 15, 2005.
	•	Prepare and file your federal and state returns together and save time.
Accurate! Secure!	•	IRS computers quickly and automatically check for errors or other missing information.
	•	The chance of being audited does not differ whether you e-file or file a paper tax return.
	•	Your bank account information is safeguarded along with other tax return information. The IRS does not have access to credit card numbers.

You cannot sign your return electronically if you are a first-time filer under age 16 at the end of 2004, or if you are filing Form 3115, 3468 (if attachments are required), 5713, 8283 (if completing Section B), 8332, 8858, or 8885.

For more details on the PIN method, visit www.irs.gov/efile and click on “IRS e-file for Individual Taxpayers.”

An Authorized IRS e-file Provider can, with your authorization, generate a PIN for you.