Income Tax Calculation For Low Income Singles

Low Income individuals with no dependents often are not required to file a federal income tax calculation for a return. Here is how to figure out the gross income level at which a single person with no dependents must file taxes.

Low Income individuals with no dependents often are not required to file a federal income tax return. Here are the levels of gross income at which low-income singles must file taxes.

Often, a low-income single person with no dependents is in the position of figuring out if he/she MUST file a federal income tax return. For those with no dependents, the answer is determined by whether someone else can claim him/her as a dependent on their tax return and his/her age (over or under 65).

The rules below are applicable to an individual who on the last day of the year is single and has no dependents. For others, this may not be the appropriate filing status.

Before looking at income, then, one must first determine whether he/she is someone else's dependent. There are four criteria, all of which must be met, for a single person to be considered a dependent for income tax purposes:

· Support - The claiming taxpayer (or taxpayer(s) in the case of someone who is under a multiple support agreement) must have provided more than half of the low-income single person's support.

· Citizenship - The low-income single must be a U.S. citizen or a resident of the U.S., Canada, or Mexico for part of the year.

· Relationship - The low-income single must be a relative of the claiming taxpayer OR live in the claiming taxpayer's household for the whole year.

· Income - If the low-income single is under 19 or between 19 - 24 and a full-time student for at least five months, then the income criteria does not apply and he/she meets the income criteria. If over 19 and not a full time student, then Gross Income must be less than the exemption amount for the income criteria to be met. Consult the IRS web site (www.irs.gov) or IRS Publication 17 for the current exemption amount. In 1999, the exemption amount was $2,750. Also, consult with the IRS or tax advisor in the case of a totally disabled individual.

If all four of the criteria are met, then the low-income single is considered a dependent for income tax purposes. If the criteria are not all met, then he/she is not a dependent.

Once dependency is determined, then one can figure out if the low-income single must file a federal income tax return. The level will differ depending upon whether the individual is above or below age 65 on the last day of the tax year.

Nondependent. This is the easier of the two to compute. If a low income single cannot be considered someone else's dependent, then filing requirements are as follows:

· Under 65 at end of year:

Standard Deduction for Singles + Personal Exemption Amount

In 1999, this was $4,300 + $2,750 = $7,050

· Age 65 or older at end of year:

Standard Deduction for Singles +Additional Standard Deduction for Age 65 or Older + Personal Exemption Amount



In 1999, this was $4,300 + $1,050 +$2,750 = $8,100

If the nondependent, single person has gross income below the filing requirement amount, then he/she is not required to file a federal income tax return for the year.

Dependent. If the low-income single meets the four criteria for dependency, then the filing requirements depend upon the dependent's unearned income (In general, income from investments), age, and blindness.

If the dependent is NOT blind and is less than 65, then he/she has to file a return if one or more of these apply:

1. Earned income was more than the standard deduction for single filing status.

2. Unearned income was more than the dependent standard deduction amount.

3. Gross income was more than the larger of a) the dependent standard deduction OR b) earned income plus $250 ($250 is 1999 amount).

If the dependent IS blind and/or 65 or older, then he/she has to file a return if one or more of these apply:

1. Earned income was more than: the standard deduction for single filing status plus the additional deduction for being blind (if applicable) plus the additional deduction for being 65 or older (if applicable)

2. Unearned income was more than $1,750 ($1,750 is 1999 amount). This amount increases by $1050 (in 1999) if the dependent is both blind and 65 or older.

3. Gross income was more than the larger of a) the dependent standard deduction OR b) earned income plus $250 ($250 is 1999 amount) PLUS the additional deduction for being 65 or older (if applicable) PLUS the additional deduction for being blind (if applicable).

For 1999, the dependent standard deduction was $700 and the blind/age 65 or older additional deduction was $1,050. The IRS issues updates around December of each year. Check the IRS web site or IRS Publication 17 for changes in amounts. Also, always study the instructions that come with your income tax return and/or consult with a tax advisor if there is any uncertainty.

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