USA Do I have to file for 2015

[ep2016]

Hi all,

Is this forum empty?

I will try to be quick with the details, but it will be hard

I just got my citizenship last year in April, but I plan to cover the whole year's income b/c it's too complicated to divide the year up.

I no longer make money from my small biz (maybe 6 sales a year), so I had to start doing self employment work in 2012 when my biz online failed. I was registered as a sole in Canada, but that expired in April 2016.

I got some 1099's for the entire year.

I left the US on Oct. 28th, 2015 & am overseas now.

I'm also Canadian & I already filed my taxes for 2015.

I had no idea that in the US when you are poor you still have to pay self employment tax In Canada you would always get a refund if you made so little money.

Anyway, by the time all the expenses were added up, I was $-250+

I'm very confused b/c 1 CPA said I have to file, & the other said b/c you made so little, you don't. Which one is it???

I already got my extension.

After this, I have to figure out what to do re: 2016, b/c some people are telling me since I get a refund from Canada, that won't count as a foreign tax credit & there's no way I can afford to pay 15.8% when I'm so strapped for cash that I never know if I can pay my rent every month. I haven't created an LLC in the US & I don't want to have to pay State tax or have to pay an accountant even MORE money just to deal with the State filings. That defeats the purpose of saving money.

And my bank account is person, not a corp. account.

I hope someone can help me.

Thanks

 

[Ugo]

So different accountants will tell you different things partly because that's how complex the tax laws are here. I am not a tax accountant (full disclosure) but I know just enough perhaps to be dangerous. I will tackle this question with reasons why and reasons why now

Why you were told not to file
- You technically don't have to file if you for sure don't owe the FG any taxes. The only way to find out sometimes is by filing
- Costs

Why you were told to file
- You received 1099s which means that income was reported to the FG. Failure to file then (if the amount is over $600) could lead to an audit. And then you'd be forced to file anyway to prove you lost money on whatever you were dealing with
- Healthcare law. This is one of the few way to prove to the government that you had health insurance through the year.

Hope this helps. It likely will only add to the confusion. If I were in your position, I would file to be safe. Cost benefit wise, it will save you some potential headaches in the future. You might even be eligible for a refund.

 

[DTA93433]

The Instructions for Form 1040 - beginning on page 8 lists three (3) different charts to use in determining whether someone needs to file a federal income tax return or not. Look at Charts A, B or C to determine whether or not you have to file. There are several reasons why someone would have to file.....too many to list here.

 

[ep2016]

So different accountants will tell you different things partly because that's how complex the tax laws are here. I am not a tax accountant (full disclosure) but I know just enough perhaps to be dangerous. I will tackle this question with reasons why and reasons why now

Why you were told not to file
- You technically don't have to file if you for sure don't owe the FG any taxes. The only way to find out sometimes is by filing
- Costs

Why you were told to file
- You received 1099s which means that income was reported to the FG. Failure to file then (if the amount is over $600) could lead to an audit. And then you'd be forced to file anyway to prove you lost money on whatever you were dealing with
- Healthcare law. This is one of the few way to prove to the government that you had health insurance through the year.

Hope this helps. It likely will only add to the confusion. If I were in your position, I would file to be safe. Cost benefit wise, it will save you some potential headaches in the future. You might even be eligible for a refund.

Thanks Ugo, yeh that's what I figured, better to be safe than sorry.

I'm still shocked that they don't give you a refund when you make so little. Canada does.

So clearly I can't afford a CPA (do they ALL cost min. $300?)

Who should I get to do my return for me?

Some BKer told me if you get a CPA to do your taxes, the IRS won't bother you, but then the one who told me I didn't have to do the tax return laughed & told me that's not true.

I'm wondering if they even know what they are doing over there based on her telling me I didn't have to do it.

Thanks again

 

[ep2016]

The Instructions for Form 1040 - beginning on page 8 lists three (3) different charts to use in determining whether someone needs to file a federal income tax return or not. Look at Charts A, B or C to determine whether or not you have to file. There are several reasons why someone would have to file.....too many to list here.

Yeh no thanks. B/c of health reasons my brain isn't computing properly & even if my brain was back to being sharp as a tic I wouldn't trust to understand whether I should or shouldn't.

Thanks though.

 

[Ugo]

I would use turbotax. It's what I use.

 

[ep2016]

I would use turbotax. It's what I use.

I know, but you are brave enough to do it yourself, I'm not

So I need to get someone to do this for me.

Any bookkeeper can do this though, correct?

Not that I trust BKers.

 

[Ugo]

You'd be surprised how easy it is to do it. I doubt that just any book keeper can do it. But a tax preparer can certainly get it done.

 

[DTA93433]

Be careful DIY (do-it-yourselfer's). I had a former client come to me recently when she decided she no longer needed my services. An independent contractor, she filed her own 2015 return. She came into my office this week and showed me a nice-little letter from the IRS. She also showed me her tax return she filed (she had used TurboTax). Her return contained 4 major errors. We now have to amend both her Federal and State returns. It going to cost her a lot more now then if she had used me originally. Tax software can never take the place of an expert.

 

[DTA93433]

One last thing: The IRS offers taxpayers with limited (low) income the option to use one of their "clinics". See the link for more information: https://www.irs.gov/advocate/low-in...taxpayer-clinic-income-eligibility-guidelines

 

[ep2016]

One last thing: The IRS offers taxpayers with limited (low) income the option to use one of their "clinics". See the link for more information: https://www.irs.gov/advocate/low-in...taxpayer-clinic-income-eligibility-guidelines

That's exactly why I WON'T do it myself. I'm not stupid.

I can't go to one of the clinics, I'm not in the US right now

Are you a CPA or what exactly?

What do you charge?

Thanks

 

[DTA93433]

Sorry about that. The clinics are only available in the U.S.

I'm an enrolled agent (Circular 230 provider). Like a CPA or attorney, enrolled agents can represent any/all taxpayers before the IRS. My rates would be comparable to a CPA or attorney.

I would think that soliciting in these forums would not be appropriate. Trying to get an answer from Admin. before I say anything further.

 

[ep2016]

You didn't solicit, I asked, but I can't afford $300+. My budget is $150.

If you know of anyone who is good & can do it, please let me know.

Thanks

 

[ep2016]

I read this:

In terms of real numbers, last year, a survey conducted by the National Society of Accountants (NSA) of nearly 8,000 tax preparers indicated that the average tax preparation fee for an itemized federal form 1040 with Schedule A and a state tax return was $233. The average cost to prepare a federal form 1040 and state return without itemized deductions was $128.

Also, can you please tell me what type of return I need based on the following:

1. Single
2. No dependents
3. Self employed
4. Low income
5. No property, investments, just wants in my bank account
6. I did get food stamps last year & Medicaid for a brief 3-5 months.
7. I was in Vegas (question, if I wasn't in Vegas, does that mean I have to file a State tax return too?). I'm learning this all from scratch as we don't have to do that in Canada.

Thanks a ton

 

[DTA93433]

To answer your questions: (1) my fee would be $165 (net) for both a Federal and State return, (2) read first pp. 8 and 9 on Instructions to Form 1040 - it explains how to determine whether or not you need to file a return. Generally speaking, you must file a Federal (and thus a State return) if your gross income exceeds the sum total of your (a) standard deduction + (b) personal exemption(s). The Instructions contain the gross income amounts. That's about the best i can recommend to you. Best of luck!

 

[ep2016]

I PMed you Stephen.