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Do you need to file a U.S. Income Tax Return

January 22, 2014

In December 2013, the U.S. Internal Revenue Service (IRS)  announced that filing a federal income tax return should happen on a yearly basis, even if no taxable income exists, to avoid issues in the future.

AG Tax professionals have prepared a list of situations, using the IRS’s guideline, which will help you determine whether you need to file a 2013 tax return.

If any of these situations apply to an individual or their family members for 2013, it is advised that they consult a tax professional immediately. The IRS has announced that it will start accepting business tax returns from 13th January, 2014 and personal tax returns (Form 1040s) from 31st January, 2014 onwards.

You should file a tax return this year if:

  • If you want to receive a refund from excess federal taxes withheld from their pension and wages for this tax year.
  • You are eligible for the Earned Income Tax Credit (EITC, federal income tax credit for low/moderate income earning married taxpayers filing as ‘married filing jointly’)
  • You are self-employed and your annual net-earnings from business is more than $400 (Note:  even if net earnings from self-employment are less than $400, an individual should consult a tax advisor in case he/she needs to file an income tax return due to any other reason.)
  • You have sold a house/rental real estate or any property, even if no profit is realized or the money is used to pay off an associated mortgage. If you wish to carry forward and utilize the gains/losses in future tax years, consult a tax professional to help you with your filings.
  • You have an early distribution from a qualified retirement plan (i.e. any withdrawal a 401(k), 403(b), or IRA before age 59½).
  • You are above age 70 (born before July 1, 1942) and have NOT taken out the required minimum distribution (RMD) from a qualified retirement plan other than a Roth IRA; or if withdrawn and the received distribution is in excess of $160,000 from the qualified retirement plan.
  • You have contributed beyond allowable limits into an Individual Retirement Account (IRA; Contribution Limit: $5,500 below 50, $6,500 above 50) and/or Medical Savings Account (MSA)/Health Savings Account (HSA) (2013 Contribution Limit: MSA $3,200 and HSA $3,250 for Individual, $6,450 if family is included, PLUS $1,000 if the individual is above 50).
  • You owe social security and Medicare tax on income, such as tips or income received from employer but no taxes were withheld by the employer.
  • You owe social security, Medicare and railroad retirement (RRTA) taxes as an employee of the railroad services.
  • Your income is subject to Alternative Minimum Tax (AMT). Taxpayers need to verify on a yearly basis if they will be subject to AMT, which treats some types of income differently and also provides special deductions/credits for certain expenses.
  • You recaptured tax due to claimed education credit, first-time homebuyer credit, or an asset depreciated for tax-purpose and was sold at a gain. Consult your tax advisor for more details.
  • You are earning equal to or more than $108.28 as a church employee (other than services performed as a minister or a member of a religious order) from a church or qualified church-controlled organization which is exempt from social security or Medicare taxes.

Nonetheless, it is advised that you file tax returns on a regular basis even in the absence of any taxable income as it helps avoid any complexities while claiming a refund of previously withheld federal income taxes.

Taxpayers should immediately consult their tax advisors to avoid any delay in preparing their tax returns as an accurate and complete tax return could take time. Also, it provides sufficient time to claim possible deductions and credits, which may be overlooked when tax returns are filed in a hurry.


AG Tax LLP Can Help

If you have any tax-related queries, need assistance with tax planning or filing your tax returns please contact us. Our team comprises of highly experienced tax professionals with extensive knowledge of U.S. and Canadian tax laws as well as cross-border compliance

Furthermore, as a full service accounting firm, AG Tax assures complete assistance with even your most complex tax needs.

We can assist with:

  • Canadian Personal and corporate tax returns
  • Cross Border Taxation and Business Planning
  • U.S. Personal and Corporate Taxation
  • Disclosure of Foreign Assets and other information filings
  • Retirement planning
  • State Sales Tax & E-commerce Taxation
  • Estate Planning, Inheritance tax advice

To obtain a quote or to arrange for a consultation to discuss your tax related queries, please contact us at:

  •  416-238-5920 (Greater Toronto Area, ON)
  • 604-538-8735 (Greater Vancouver Area, BC)
  • 780-702-2732 (Greater Edmonton Area, AB)


Disclaimer: The information in this publication is accurate as of the time of its publication. AG Tax assumes no responsibility for changes to tax legislation subsequent to the publication of this document. The information provided is for general information purposes only and should not be acted upon without seeking professional advice. If you would like to engage our services, please contact our staff and obtain authorization to send our firm confidential information. A client relationship is not created by the transmission of information. A client relationship is only formed with our firm when a scope and engagement letter signed by the firm and the potential client detailing the terms of engagement is present.

ABOUTAylett Grant Tax, LLP
With offices across Canada, we are positioned to manage and process the full scope of your Canadian, US and US Canada cross-border tax filing needs.
12752 28th Ave, Surrey, BC, V4A 2P4
104–4220 98 St NW Edmonton AB, T6E 6A1
With offices across Canada, we are positioned to manage and process the full scope of your Canadian, US and US Canada cross-border tax filing needs.
12752 28th Ave, Surrey, BC, V4A 2P4
104–4220 98 St NW Edmonton AB, T6E 6A1

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