When Do You Have File Taxes

You Live In One State And Work In Another State

If you live in one state but happen to work in a neighboring state, you may have to file a state tax return with both states. However, if your state has a reciprocity agreement with that state, you will typically only need to pay state taxes to the state where you live.

Lets say you live in Arizona but work in California. Arizona charges a top state tax rate of 4.5% and California charges a top tax rate of about 12%. Since Arizona taxes its residents on income earned in any state, you will pay Arizona state taxes on your California earnings. You wont pay taxes in both states.

Irina Petrashkevich, certified public accountant and senior manager for tax policy and advocacy for AICPA says many states have entered into reciprocal agreements to ensure employees who reside in their states are not also subject to tax in other states where they may go to work.

This is intended to provide tax simplicity to taxpayers. Reciprocal agreements typically specify that employers should withhold income taxes on a nonresident employees wages only for the employees resident state, Petrashkevich says.

Each of the reciprocal agreements has their own rules and require forms to be completed by employees in order for employers to be exempt from withholding under the agreements, Petrashkevich says. If youre unsure about what rules apply to you, she advises that you speak with a tax professional.

What Happens To My Tax Deadlines If I Live In An Area Impacted By A Natural Disaster

If you need more time because you live in an area hit by a natural disaster, you might qualify for tax relief from the IRS. The IRS often postpones the tax filing deadline for taxpayers who live in or have a business within a federally declared disaster area.

For example, the IRS announced it would postpone tax filing and tax payment deadlines for taxpayers affected by the September 2020 California wildfires.

If You Made No Money You Probably Don’t Have To File Taxes

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Federal law doesnt require you to file a tax return if you didnt earn any money during the previous tax year. This might be the case even if you did earn some money but your earnings were less than the amount of that tax years standard deduction.

So why bother filing a tax return if theres no income left after you subtract the deduction? There are a few reasons you might want to do so, even if you dont technically have to. For starters, you could be leaving money on the table. Learn more about why you might want to file taxes.

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Penalties For Not Paying Your Taxes

Even if you file an extension to submit your tax return, you must pay any estimated tax you owe by April 15, 2022. If you do not pay your taxes, you will be charged a penalty and owe interest on any unpaid balance.

The penalty for failing to pay your taxes by the due date is 0.5 percent of your unpaid tax for each month or part of a month that your return is late. This penalty is capped at 25 percent of late unpaid taxes. If you file your return on time and request to pay by an installment agreement, the penalty drops to 0.25 percent for each month or part of a month of the installment agreement.

Youre also charged interest on the unpaid balance, which compounds daily. The rate is set each quarter and is based on the federal short-term rate, plus an additional 3 percent.

If you owe taxes and dont file your return on time, youll be charged a penalty for failing to file. This is usually 5 percent of the tax owed for each month or part of a month your return is late. This penalty is also capped at 25 percent.

Does Everyone Need To File An Income Tax Return

OVERVIEW

Not everyone is required to file an income tax return each year. Generally, if your total income for the year doesn’t exceed certain thresholds, then you don’t need to file a federal tax return. The amount of income that you can earn before you are required to file a tax return also depends on the type of income, your age and your filing status.

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Estimated Tax Payments: What They Are How They Work And When To Pay

If you have a side hustle, do freelance work or own your own business, you should make quarterly estimated tax payments.

Income tax is regularly collected from US workers’ paychecks. But if you don’t work a traditional job, you may need to make your own income tax payments throughout the year, also known as estimated tax payments.

If you have a side hustle, take on freelance work or have your own business, your income likely isn’t automatically taxed by an employer. In this case, you should make estimated payments four times a year. If you have other revenue not subject to withholding — interest, dividends, capital gains, alimony, cryptocurrency or rental income — you also typically need to make quarterly estimated tax payments to the IRS.

Doing this not only minimizes your financial burden when tax day arrives, but it can help you avoid IRS penalties.

The estimated-tax filing process can seem complicated, but we’re here to simplify it for you. Here’s everything you need to know to calculate your taxes and file on time.

You May Want To File Even If Youre Not Required To

If youll receive a tax refund, you should file a tax return even if youre not required to.

If youre not required to file taxes but you withheld taxes throughout the year, you can get that money back when you file your tax return.

You may also be eligible for refundable tax credits that will give you a tax refund even if you dont owe taxes. These credits include the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit.

If you didnt receive your first, second, or third stimulus checks or didnt get the full amount that youre eligible for, you can claim the stimulus checks when you file a tax return.

If youre not sure if you withheld taxes or qualify for tax credits, you may want to file a tax return anyway to avoid missing out. You have up to three years to file previous years taxes and/or claim past tax credits.

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You Can Claim Refundable Tax Credits

Refundable tax credits are particularly valuable for low-income taxpayers because they can provide a refund beyond what you paid for the year via withholding or estimated tax payments.

In other words, if its worth more than the tax you owe, the IRS will issue you a refund for the difference. Refundable credits include:

Types Of Income For Dependents

Whether your child is required to file a tax return depends on the applicable standard deduction and how much earned and unearned income the child had during the year.

What is earned income? Earned income is income a child earns from working. It includes salary or wages, tips, professional fees, and taxable scholarship and fellowship grants.

What is unearned income? Unearned income is investment-type income. It includes taxable interest, dividends, capital gains, unemployment compensation, Social Security benefits, annuities, and distributions of unearned income from a trust.

Read Also: How To Know If You Owe Taxes

When Are Taxes Due

The federal tax deadline has been slightly extended for individuals for 2022 returns.

Typically, the deadline to file taxes is April 15, although it’s been extended to May and beyond in recent years because of the coronavirus pandemic.

This year, it’s on April 18, 2023, to accommodate the holiday of Emancipation Day on April 17, which is recognized in Washington DC. State tax deadlines may vary so make sure to check your state’s government website for accurate information.

How Do I Calculate My Estimated Taxes

There are a few ways to calculate your quarterly tax payments depending on your business model and annual earnings.

• If you earn a steady income, estimate the tax you’ll owe for the year and send one-fourth to the IRS each quarter. For instance, let’s say you’ll earn $80,000, which places you in the 22% marginal tax bracket. You’ll owe $17,600 in federal taxes or $4,400 each quarter in 2022.

• If your income varies throughout the year, you can estimate your tax burden based on your income and deductions in the previous quarter. The IRS Estimated Tax Worksheet can help you do the math.

If you’ve overestimated your earnings at the end of the year, you can complete a 1040-ES form to receive a refund or apply your overpayment to future quarterly taxes. If you underpaid, the form can help you calculate what you still owe.

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When Are 2022 Taxes Due

The due date for filing your tax return is typically April 15 if youre a calendar year filer. Generally, most individuals are calendar year filers.

For individuals, the last day to file your 2022 taxes without an extension is April 18, 2023, unless extended because of a state holiday. You could have submitted Form 4868 to request an extension to file later during the year.

If you have a business that operates on a fiscal year basis, your return is typically due on or before the 15th day of the third or fourth month after the close of your fiscal year. In instances where this due date falls on a Saturday, Sunday, or legal holiday, the due date is moved to the next business day.

The last day to do taxes isnt the only important tax deadline to know, however. There are several other important tax deadlines you should know for 2023. If you’re wondering, “When are taxes due, anyway?” Here are the important dates at a glance.

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Affordable Care Act Premium Credit Claim

If you have health care coverage as required by the Affordable Care Act, also known as ACA or Obamacare, you might need to file a return.Specifically, this will be the case if you qualified for federal help in buying your health care coverage through the health insurance marketplace or exchange. If advance payments of the ACA premium tax credit were made for you, your spouse or a dependent who obtained such marketplace medical coverage, that amount must be reported by filing a Form 1040 tax return and Form 8962, Premium Tax Credit.

This will ensure that you got the appropriate tax credit in advance. If you received too much premium help, youll have to repay it when you file your return. If you did not get enough, you can collect the extra when you file.

How Do I Prevent Tax Fraud

It’s easy to procrastinate filing your taxes, but putting it off makes you more vulnerable to fraud. If a scammer gets hold of your Social Security number and you haven’t filed a tax return yet, they could easily file a fake one in your name to get a refund.

Scam calls are ubiquitous during tax season. Keep in mind that if the IRS needs to get in touch with a taxpayer, it sends a letter not an email, not a phone call, and definitely not a message over social media. Especially when it’s investigating cases of tax fraud or performing an audit.

Never return a phone call from someone claiming to be with the IRS. Instead, individuals should call the IRS directly at 1-800-829-1040, and businesses should call 1-800-829-4933.

The US Department of Justice says the IRS never discusses personal tax issues through unsolicited emails or texts, or over social media. Always be wary if you are contacted by someone claiming to be from the IRS who says you owe money.

If you receive an unexpected and suspicious email from the IRS, forward it to .

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• Estimate your tax refund andwhere you stand

• Know how much to withhold from your paycheck to get

• Estimate your self-employment tax and eliminate

• Estimate capital gains, losses, and taxes for cryptocurrency sales

The above article is intended to provide generalized financial information designed to educate a broad segment of the public it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

New Mexicos Law Says Every Person Who Has Income From New Mexico Sources And Who Is Required To File A Federal Income Tax Return Must File A Personal Income Tax Return In New Mexico

You must also file a New Mexico return if you want to claim:

• a refund of New Mexico state income tax withheld from your pay, or
• New Mexico rebates or credits.

Nonresidents, including foreign nationals and those who reside in states that do not have income taxes, must file when they have both a federal filing requirement and income from any New Mexico source whatsoever.

A member of the military who was a resident of New Mexico at the time of enlistment and has not changed the state of residency must file a New Mexico income tax return.

The income of members of an Indian nation, tribe or pueblo who work or live on lands outside the Indian nation tribe or pueblo of which they are members are subject to New Mexico income tax.

For additional information refer to the frequently asked questions .

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Should I File A Tax Return Even If It Is Not Required

If you could get a benefit by filing a tax return, you should consider filing a tax return even when not legally required to do so. If you had some tax withholding, you may want to file a tax return to get those benefits back. If you are in the position that you have no filing requirement each year, it may be wise to set all tax withholding to zero.

For the 2021 tax return, there may be two other reasons to file a tax return even if not required:

Another time to file when not legally obligated to is if you are required to file your state return and you want to file it electronically. Sometimes state tax returns will not be processed electronically if a federal tax return is not processed first.

Filing Requirements For Dependents

The IRS has different tax filing requirements for people claimed as dependents on another persons return. For dependents, filing status and age are factors, but so is the type of income received, whether earned or unearned.

• Earned income includes salaries, wages, tips, professional fees, and taxable scholarships and fellowship grants.
• Unearned income includes taxable interest, ordinary dividends, capital gain distributions, unemployment compensation, taxable social security benefits, pensions, annuities, and distributions from a trust.

Here are the minimum income limits from the Draft 2021 Form 1040 Instructions:

Dependent children can avoid filing a tax return if they have only interest and dividend income and a parent elects to report the childs income on their own return. To make this election, you have to meet all of the following requirements:

If you meet all the requirements outlined above, youll report the childs income on Form 8814 and file it with your Form 1040.

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