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We have researched both the federal and state tax ramifications of persons 65 and over required to file tax returns. Our understanding of the facts the way you described them to us during our meeting on April 4, 2005 are as follows: 1) Your mom is over 65 years old. 2) Your mom is a US citizen. 3) Your mom’s filing status is head of household. 4) Your mom has one (1) dependent. 5) Your are inquiring on the minimum amount of gross income during fiscal year 2004 that is needed in order for an individual income tax return to become mandatory at federal and state level.
 

FEDERAL LEVEL As a U.S. citizen your mom must file an income tax return every year when her gross income (including excluded homesale gain and foreign earned income that equals or exceeds a certain amount in accordance with Internal Revenue Code 6012(a)(1)(B). This amount is determined by adding the amount of exemption(s) and the basic standard deduction applicable to her. The threshold for 2004 for persons 65 or older is $11,750.
 

STATE LEVEL For California residents the Franchise Tax Board sets up the minimum threshold amounts of gross income and adjusted gross income required in order for a personal income tax return to be mandatory. These amounts are adjusted annually for inflation. Their authority use by the board is California Revenue and Taxation Code 18501(a), (b), (d) and (e). Your mom will have to file a California tax return for 2004 if her gross income exceeded $23,604 or her adjusted gross income exceeded $21,058. We have to reiterate the fact that these numbers at state level for fiscal year 2004 are valid only for head of households with one (1) dependent.
If your mom needs help in determining the amount of gross income and adjusted gross income and needs additional support please e-mail us.

 

Very truly yours, TaxCaffe

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