Tax Time for U.S. Citizens

written by Steven Pittser

If you are a U.S. citizen, the rules for filing income tax returns are generally the same whether you live in the States or abroad. The following is a brief summary of the criteria that would require an individual to file a 2008 tax return.

If you are married filing jointly and your gross income (all income – earned income, investment income, interest, rentals, taxable Social Security, etc.) was at least $17,900 ($18,950 if one spouse is over 65; $20,000 if both are over 65), then you must file a return.

If you are single and your gross income was at least $8,950 ($10,300 if you are 65 or older), you must file.

Married or single, you may not owe any tax due to the foreign earned income exclusion, which is $87,600 for 2008, but there would still be a penalty for not filing.
If you are married filing jointly and all of your gross income plus one-half of your Social Security add up to more than $32,000 (more than $25,000 if you are single), then you have to start adding a portion of your Social Security to your taxable gross income. How much depends on how far over those figures you are. If there is self-employment income of $400 or more, then you must file, due to owing Social Security and Medicare taxes (even though you may not owe any income tax).
Important Note: Because of the Rebate Recovery Credit for 2008, many people who would not be required to file, should file to claim their credit. For example, a married couple whose only income is Social Security would receive a rebate refund of $600, if they had received no stimulus payment for 2007 ($300 for a single person). If a married couple had earned wages of less than $17,900 (normally allowing them to not file), their rebate refund would be $600 if they do file ($300 for a single person with less than $8,950 income).

Believe it or not, the IRS encourages people to file, even if the only reason for filing is to claim their rebate credit.