Most U.S. citizens and permanent residents who work in the United States need to file a tax return if they make more than a certain amount for the year.
The IRS has a variety of information available on IRS.gov to help taxpayers, including a special “free help” page. Here are some specific details to help people if they need to file a tax return.
Factors that affect whether someone needs to file a tax return
Here are some of the things that affect whether someone must file a tax return.
Gross income. Gross income means all income a person received in the form of money, goods, property and services that aren’t exempt from tax. This includes any income from sources outside the United States or from the sale of a main home, even if you can exclude part or all of it.
Required filing threshold. People need to see if their gross income is over the required filing threshold. Filing statuses have different income thresholds, so individuals may need to consider their potential filing status as well.
Self-employment status.Self-employed individuals must file an annual return and pay estimated tax quarterly if they had net earnings from self-employment of $400 or more.
Status as a dependent. A person claimed as a dependent may still have to file a return. It depends on their gross income, including:
Earned income. This includes salaries, wages, tips, professional fees and other amounts received as pay for work performed.
Unearned income. This is investment-type income and includes interest, dividends and capital gains, rents, royalties, etc. Distributions of interest, dividends, capital gains and other unearned income from a trust are also unearned income to a beneficiary of the trust.
A parent or guardian must file a tax return for dependents who need to file but aren’t able to file for themselves.
Potential benefits when people file a tax return
Get money back. In some cases, people may get money back when they file a tax return. For example, if their employer withheld taxes from their paycheck, the person may be due a refund.
Avoid interest and penalties. People can avoid interest and penalties by filing an accurate tax return on time and paying any tax they owe before the deadline. They should file on time or request an extension to avoid some penalties. If they owe a tax debt and can’t pay all or part of it, the IRS can help.
Build Social Security benefits. Reporting income on a tax return is important for self-employed people because this information is used to calculate their Social Security benefit. Unreported income can lead to an incorrect calculation.
Get an accurate picture of income. When people report all their income, they give lenders an accurate financial picture to determine the loan amounts and rates they may receive.
Get peace of mind. When people file an accurate tax return and pay their taxes on time, they know that they’re doing the right thing to follow the law.
Some people should consider filing even if they aren’t required
People may want to file even if they make less than the filing threshold because they may get money back. This could apply to them if they:
Have had federal income tax withheld from their pay
The Interactive Tax Assistant is an online tool that provides answers to common tax law questions based on an individual’s specific circumstances. Based on a user’s input, it can determine if they should file a tax return. It can also help them understand:
Their filing status
If they can claim a dependent
If the type of income they have is taxable
If they’re eligible to claim a credit
If they can deduct expenses
The information is anonymous and only used to help answer the person’s question. The tool will not share, store or use information in any other way, and it can’t identify the individual using it. The system discards the information the user provides when they exit a topic.
IRS offering additional time at Taxpayer Assistance Centers for face-to-face help
Helped by Inflation Reduction Act funding, nearly 250 IRS Taxpayer Assistance Centers nationwide will have extended operating hours Tuesdays and Thursdays during the tax filing season
IR-2024-25, Jan. 29, 2024
WASHINGTON — The Internal Revenue Service today announced nearly 250 IRS Taxpayer Assistance Centers (TACs) around the country will extend their weekly office hours to give taxpayers additional time to get the help they need during the filing season.
The extended office hours will continue through Tuesday, April 16. To see if a nearby TAC is offering extended hours, taxpayers can visit Contact your local office to access the IRS.gov TAC Locator tool. The site lists services offered, including extended hours and directions to each office. Taxpayers can call 844-545-5640 to make an appointment or walk in to get help at designated TACs offering the additional time. Normally, TACs are open from 8:30 a.m. to 4:30 p.m., Monday through Friday, and operate by appointment.
The expanded hours at the assistance centers reflect funding and staffing made possible under the Inflation Reduction Act, which is being used across the IRS to improve taxpayer service, add new technology and tools as well as help tax compliance efforts.
“This is another example of how additional IRS resources are helping taxpayers across the country,” said IRS Commissioner Danny Werfel. “Adding extra hours provide more options for hard-working taxpayers to get help with their tax issues. The IRS is continuing to work hard both during the upcoming tax season and throughout the year to find ways to make it easier for people to interact with us.”
“We’re inviting anyone who wants or needs some assistance to stop by,” added IRS Wage & Investment Division Commissioner and Taxpayer Experience Officer Ken Corbin. “This is one more way the IRS is delivering expanded services to help visitors resolve their tax issues, make a payment or answer general tax-related questions. Whatever the case, we’re offering additional time for taxpayers to get the face-to-face help they may need.”
During these additional office hours, TACs will offer all regular services, however for cash payments, taxpayers must have an appointment. If a taxpayer needs in-person identity verification services, they must bring two forms of identification, and one must be a current government-issued photo ID. They should also bring a copy or digital image of the tax return in question if one was filed. Tax return preparation is not a service provided at any IRS TAC.
If a taxpayer needs a sign language interpreter or help with foreign language interpretation, the IRS encourages them to make an appointment. Deaf or hard of hearing individuals who need sign language interpreter services, can call TTY/TDD 800-829-4059 to make an appointment. IRS can also arrange for language interpretation in many languages through an over-the-phone professional translation service.
Tax return preparation options
While tax return preparation is not a service offered at IRS TACs, qualified taxpayers can get help using the following free services:
• Eligible individuals or families can get free help preparing their tax return at Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) sites. To find the closest free tax return preparation help, use the VITA Locator Toolor call 800-906-9887. • To find an AARP Tax-Aide site, use the AARP Site Locator Tool or call 1-888-227-7669. • Any individual or family earning $79,000 adjusted gross income (AGI) or less in 2023 can use IRS Free File’s Guided Tax Software at no cost. There are products in English and Spanish. • Free File Fillable Forms are electronic federal tax forms, equivalent to a paper 1040 form. Taxpayers should know how to prepare their own tax return using form instructions and IRS publications, if needed. Anyone, regardless of income, can use the forms. It provides a free option to taxpayers whose AGI is greater than $79,000. • MilTax, a Department of Defense program, offers free return preparation software and electronic filing for federal tax returns and up to three state income tax returns. It’s available for all military members, and some veterans, with no income limit. • The IRS is piloting a new tax filing service during the upcoming filing season called Direct File that gives eligible taxpayers a new choice to file their 2023 federal tax returns online, for free, directly with the IRS. Find more information on Direct File about Direct File pilot eligibility, scope and the participating states.
Help available 24/7 at IRS.gov The fastest and easiest way for people to get the help they need is through IRS.gov. Go to www.irs.govfor more information. Available resources include: •IRS Online Account: Taxpayers can securely access their individual account information. • Where’s My Refund?: Taxpayers can check their refund status and estimated delivery date. • Identity Protection Pin (IP PIN): Taxpayers can prevent someone from using their information to file a fraudulent tax return. • Get Transcript: Taxpayers can view and print a tax transcript online. • Direct Pay: Taxpayers can make tax payments or estimated tax payments from their checking or savings account. • Electronic Federal Tax Payment System: Individuals or businesses can make all types of federal tax payments. • Online Payment Agreement: Taxpayers can set up installment payments to pay taxes they owe. • Where’s My Amended Return?: Taxpayers can track the status of their amended return. • Interactive Tax Law Assistant: Individuals can get answers to many tax questions. • All IRS Forms and Publications: Individuals can find and download current tax forms, instructions and publications. Those who do not have access to the internet can call 800-829-3676 to order tax forms by mail.
If a taxpayer sold goods or services in 2023 and received payments through certain payment apps or online marketplaces or accepted payment cards, they could have received a third party reporting document Form 1099-K, Payment Card and Third Party Network Transactions.
Following feedback from taxpayers, tax professionals and payment processors, and to reduce taxpayer confusion, the IRS announced Notice 2023-74, which delayed the new federal law $600 reporting threshold for tax year 2023 on Form 1099-K, Payment Card and Third Party Network Transactions. The previous reporting thresholds remained in place for 2023, which are more than $20,000 in payments and over 200 transactions. Taxpayers could have still received forms below the threshold.
It’s important to know that regardless of if a taxpayer received a Form 1099-K or not, they must report their income. This includes payments they receive in cash, property, goods, digital assets or foreign sources or assets.
The Form 1099-K should not report personal payments like gifts and reimbursements.
What to do when filing taxes
It’s important to understand why an individual received a Form 1099-K. Taxpayers can then use it with their other tax records when it’s time to file their return. The form provides the gross amount of payment card/third party network transactions and may include a combination of different kinds of total payments received.
It’s important to note, just because a payment is reported on a Form 1099-K does not mean it’s taxable.
Taxpayers should review the form or forms, determine if the amount is correct, and determine any deductible expenses associated with the payment they may be able to claim when they file their taxes.
Selling personal items at a loss
If an individual sold items at a loss, which means they paid more for the items than for what they sold them, there is not a tax liability. They’ll be able to zero out the payment on their tax return by reporting both the payment and an offsetting adjustment on a Form 1040, Schedule 1. This will ensure if they received these forms, they don’t have to pay taxes they don’t owe.
Selling personal items at a gain
If an individual sold items at a gain, which means they paid less than for what they sold it, they will have to report that gain as income, and it’s taxable.
If the payee Taxpayer Identification Number (TIN) or gross payment amount is incorrect taxpayers should request a corrected form from the issuer.
See “Filer” on the top left corner of Form 1099-K to find the name and contact information of the issuer. If a taxpayer doesn’t recognize the issuer, they should contact the Payment Settlement Entity (PSE) identified on the bottom left corner of the form above their account number.
Keep a copy of the corrected Form 1099-K with other tax records, along with any correspondence from the issuer or PSE.
Don’t contact the IRS. The IRS can’t correct a Form 1099-K from an issuer.
Don’t wait to file taxes. To file a tax return, take these steps:
If the Payee Taxpayer Identification Number (TIN) is incorrect report payments from the Form 1099-K and any sources of income on the appropriate tax return you normally file.
If you use any of the available cash apps receive payments, you may have received a Form 1099-K from any of the Third Party Networks. In 2022 the IRS originally set the threshold at requiring the issuance of Form 1099-K at $600.00. The IRA subsequently revised this low threshold pending “further studies” to determine a fair threshold.
Here is a recent release notice from the IRS with some new information and frequently asked questions for taxpayers:
Issue Number: IR-2024-33
IRS revises and updates frequently asked questions about Form 1099-K
WASHINGTON — In an effort to provide more resources for taxpayers during this filing season, the Internal Revenue Service today revised frequently asked questions (FAQs) for Form 1099-K, Payment Card and Third Party Network Transactions in Fact Sheet FS-2024-03.
The revised FAQs provide more general information for taxpayers, including common situations, along with more clarity for industry and what organizations should send Forms 1099-K. The FAQs are in addition to a recently updated Understanding your Form 1099-K on IRS.gov page and other communications resources.
Following feedback from taxpayers, tax professionals and payment processors, and to reduce taxpayer confusion, the IRS announced on Nov. 21, 2023, Notice 2023-74 to delay the new $600 Form 1099-K reporting threshold for third party settlement organizations for calendar year 2023.
As the IRS continues to work to implement the new law, the agency is treating 2023 as an additional transition year, which applies to taxes filed this year. As a result, reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023, although taxpayers may still receive a form for amounts less than the required reporting amount.
The updates to the FAQs contain substantial changes within each section:
General Information
What to Do If You Receive a Form 1099-K
Common Situations
Third Party Filers of Form 1099-K
Should My Organization Be Preparing, Filing and Furnishing Form 1099-K?
More information about taxpayer reliance on guidance published in the Internal Revenue Bulletin and FAQs is available.
Dirty Dozen: Taking tax advice on social media can be bad news for taxpayers; schemes circulating involving tax forms
WASHINGTON – The Internal Revenue Service today continued the Dirty Dozen series with a warning on day seven about trusting tax advice on social media that can lure otherwise honest taxpayers and tax professionals into compromising tax situations.
Social media can circulate inaccurate or misleading tax information, and the IRS has recently seen several examples. These can involve common tax documents like Form W-2 or more obscure ones, like Form 8944 that’s aimed at a very limited, specialized group. Both schemes encourage people to submit false, inaccurate information in hopes of getting a refund.
“There are many ways to get good tax information, including from a trusted tax professional, tax software and IRS.gov. But people should be incredibly wary about following advice being shared on social media,” said IRS Commissioner Danny Werfel. “The IRS continues to see a lot of inaccurate information that could get well-meaning taxpayers in trouble. People should remember that there is no secret way to fill out a form and simply get a larger refund that they aren’t entitled to. Remember, if it sounds too good to be true, it probably is.”
Fraudulent form filing and bad advice on social media are part of the 2023 IRS annual Dirty Dozen campaign – a list of 12 scams and schemes that put taxpayers and the tax professional community at risk of losing money, personal information, data and more.
Working together as the Security Summit, the IRS, state tax agencies and the nation’s tax industry have taken numerous steps since 2015 to warn people about common scams and schemes during tax season and beyond, including identity theft schemes. The Security Summit initiative is committed to protecting taxpayers, businesses and the tax system against fraud and identity theft.
Some items on this year’s Dirty Dozen list are new, while others are re-emerging. While the Dirty Dozen is not a legal document or a formal listing of agency enforcement priorities, it is intended to alert taxpayers and the tax professional community about various scams and schemes.
Trending on social media: Fraudulent form filing and bad advice
Social media can connect people and information from all over the world. Unfortunately, sometimes people provide bad advice that can lure good taxpayers into trouble. The IRS warns taxpayers to be wary of trusting internet advice, whether it’s a fraudulent tactic promoted by scammers or it’s patently false tax-related scheme trending across popular social media platforms.
The IRS is aware of various filing season hashtags and social media topics leading to inaccurate and potentially fraudulent information. The central theme involves people trying to use legitimate tax forms for the wrong reason. Here are just two of the recent schemes circulating online:
Form 8944 fraud
A recent example of bad advice circulating on social media that could lead to fraudulent form filing involves Form 8944, Preparer e-File Hardship Waiver Request. There are wildly inaccurate suggestions being made about this form. Posts claim that Form 8944 can be used by taxpayers to receive a refund from the IRS, even if the taxpayer has a balance due. This is false information. Form 8944 is for tax professional use only.
While Form 8944 is a legitimate IRS tax form, it’s intended for a targeted group of tax return preparers who are requesting a waiver so they can file tax returns on paper instead of electronically. It is not in any way a form the average taxpayer can use to avoid tax bills. Taxpayers who intentionally file forms with false or fraudulent information can face serious consequences, including potentially civil and criminal penalties.
Form W-2 fraud
This scheme, which is circulating on social media, encourages people to use tax software to manually fill out Form W-2, Wage and Tax Statement, and include false income information. In this W-2 scheme, scam artists suggest people make up large income and withholding figures as well as the employer its coming from. Scam artists then instruct people to file the bogus tax return electronically in hopes of getting a substantial refund.
The IRS, along with the Security Summit partners in the tax industry and the states, are actively watching for this scheme. In addition, the IRS works with payroll companies and large employers – as well as the Social Security Administration – to verify W-2 information.
The IRS and Summit partners warn people not to fall for this scam. Taxpayers who knowingly file fraudulent tax returns potentially face significant civil and criminal penalties.
How taxpayers can verify information
Keep in mind: If something sounds too good to be true, it probably is.
gov has a forms repository with legitimate and detailed instructions for taxpayers on how to fill out the forms properly.
Use IRS.gov, official IRS social media accounts, or other government sites to fact check information.
Make a difference: Report fraud, scams and schemes
As part of the Dirty Dozen awareness effort, the IRS encourages people to report individuals who promote improper and abusive tax schemes as well as tax return preparers who deliberately prepare improper returns.
To report an abusive tax scheme or a tax return preparer, people should mail or fax a completed Form 14242, Report Suspected Abusive Tax Promotions or Preparers and any supporting materials to the IRS Lead Development Center in the Office of Promoter Investigations.
Mail:
Internal Revenue Service Lead Development Center
Stop MS5040
24000 Avila Road Laguna Niguel, CA 92677-3405
Fax: 877-477-9135
Alternatively, taxpayers and tax practitioners may send the information to the IRS Whistleblower Office for possible monetary reward.
WASHINGTON – The Internal Revenue Service issued a consumer alert today to warn taxpayers of new scams that urge people to use wage information on a tax return to claim false credits in hopes of getting a big refund.
One scheme, which is circulating on social media, encourages people to use tax software to manually fill out Form W-2, Wage and Tax Statement, and include false income information. In this W-2 scheme, scam artists suggest people make up large income and withholding figures as well as the employer it is coming from. Scam artists then instruct people to file the bogus tax return electronically in hopes of getting a substantial refund – sometimes as much as five figures – due to the large amount of withholding.
The IRS along with the Security Summit partners in the tax industry and the states, are actively watching for this scheme and others. In addition, the IRS works with payroll companies and large employers – as well as the Social Security Administration – to verify W-2 information.
With National Consumer Protection Week starting Monday, the IRS and Summit partners warn people not to fall for these scams.
“We are seeing signs this scam is increasing, and we worry that innocent taxpayers could be at risk of being tempted into falling into a trap that puts them at risk of financial and criminal penalties,” said Acting IRS Commissioner Doug O’Donnell. “The IRS and Security Summit partners remind people there is no secret way to get free money or a big refund. People should not make up income and try to submit a fraudulent tax return in hopes of getting a huge refund.”
Two variations of this scheme are also being seen by the IRS; both involve misusing Form W-2 wage information in hopes of generating a larger refund:
One variation involves people using Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, to claim a credit based on income earned as an employee and not as a self-employed individual. These credits were available for self-employed individuals for 2020 and 2021 during the pandemic; they are not available for 2022 tax returns.
A similar variation involves people making up fictional employees employed in their household and using Schedule H, Household Employment Taxes, to try claiming a refund based on false sick and family wages they never paid. The form is designed to report household employment taxes if a taxpayer hired someone to do household work and those wages were subject to Social Security, Medicare or FUTA taxes, or if the employer withheld federal income tax from those wages.
For anyone who has participated in one of these schemes, there are several options that the IRS recommends. People can amend a previous tax return or consult with a trusted tax professional
