Question

Which of the following individuals are required to file a tax return for 2015? Should any of these individuals file a return even if filing is not required? Why or why not?

a. Patricia, age 19, is a self-employed single individual with gross income of $5,200 from an unincorporated business. Business expenses amounted to $4,900.
b. Mike is single and is 67 years old. His gross income from wages was $10,800.
c. Ronald is a dependent child under age 19 who received $6,500 in wages from a part-time job.
d. Sam is married and files a joint return with his spouse, Lana. Both Sam and Lana are 67 years old. Their combined gross income was $24,250.
e. Quinn, age 20, is a full-time college student who is claimed as a dependent by his parents. For 2015, Quinn has taxable interest and dividends of $2,500.

Answer 1

Each individual’s filing requirement depends on their specific financial details such as income and deductions. Patricia, Mike, and Quinn are not mandated to file a return based on their income levels and status but may benefit from filing. Ronald and the couple Sam and Lana are required to file a tax return for 2015.

Step-by-step explanation:

The requirement to file a tax return for 2015 and the decision on whether to file even when not required, depend on several factors including the individual's income, age, filing status, and whether they are claimed as a dependent. Here are the considerations for each individual listed:

• Patricia, age 19, is self-employed with gross income of $5,200 and business expenses of $4,900. Since her net income of $300 falls below the standard filing requirement, she is not required to file a tax return. However, Patricia might want to file a return to pay self-employment tax or to receive a refund of any taxes withheld.
• Mike, at 67 years old with a gross income of $10,800, is below the standard threshold for his age group, so he is not required to file a return. But if taxes were withheld from his wages, he may file to get a refund.
• Ronald, a dependent child under age 19 with wages of $6,500, exceeds the standard amount for a dependent minor and is required to file a return.
• Sam and Lana, both 67 years old with a combined income of $24,250, exceed the filing threshold for a married couple, making them required to file a joint tax return.
• Quinn, age 20 and a dependent student, has $2,500 in investment income. He is required to file because his unearned income exceeds the threshold for dependents.

Even if filing is not strictly required, individuals might still choose to file for reasons such as reclaiming withheld taxes, establishing a tax record, or qualifying for tax credits.