Filing requirements for 2010

No pub.. a Revenue Procedure.

I don't think the numbers are out yet. They are adjusted each year for inflation, and we need to live through 2009 first.

The answer is always around page 8 of the instructions, although lots of websites will publish it too.

For 2009, there is also a penalty for filing your tax return late.

over 60 days late. If you file your return more than 60 daysafter the due date or extended due date, the minimum penalty is thesmaller of $135 or 100% of the unpaid tax.

So if you had income of 10850 (so your taxable income is $100 at 10%), $200 withheld in tax, and you file a tax return to get $190 back, but you file more than 60 days late, you actually will get only $180 back as there is a penalty is min(10,135)=$10.

There is nothing new about that. The same statement has been in Pub. 17 since at least 2000. (And probably well before then, but I didn't look back any further than that.)

You will get the full $190 back. The penalty is min(0,135)=$0. There is no unpaid tax. You OVERpaid. That's why you're getting a refund. Unpaid tax means a balance due on your return that you didn't pay by April 15. If you get a refund, there is no penalty.

Bob Sandler

Thanx.

I just searched thru the document for all occurrences of "gross income" and found no mention of the limit that is usually stated around page 8 in the instructions for form 1040.

Did I miss it?

The filing requirement is a derived number. E.g, Single, age 65,

2009 derives from the sum of the personal exemption plus the std deduction plus the kicker for being at least age 65: 3650+5700+1400750. Just use the same numbers from the RP for 2010.

The 2010 numbers *are* out. The CPI-U calculation used for all the various indexations is Sep-to-Sep (i.e. the US govt fiscal year). The

2010 numbers were announced back in September.

Since CPI-U from Sept 2008 to Sept 2009 did not increase, all the various numbers (personal exemption, standard deduction, bracket cutoffs, etc) have the same values for 2010 as they did in 2009.

-- Rich Carreiro snipped-for-privacy@rlcarr.com

Adding the personal exemption + std deduction + the kicker for 65, I get:

3500 + 5450 + 1350 = 10300 for 2008, which is correct 3650+ 5700+ 1400= 10750 for 2009, which is correct 3650+ 5700+ 1400= 10750 for 2010, so there appears to be no change from 2009, is that correct?

Yes.

Actually, the standard deduction for head of household filing status increased from $8,350 (in 2009) to $8,400 (in 2010). Also, several break points between marginal rates on the Tax Rate Schedules have moved upward slightly. See Rev Proc 2009-50 at

Could I actually convert 13749, as I could also deduct a $3000 capital gain loss from a carry forward?

In this case, would I have to file a tax return, as the gross income would still be 10749?

I'm reminded of the old Certs commercials. We seem to have two questions in one.

1. Could you convert (I assume this is a fully taxable Roth conversion) ,749 and pay not tax?

Academic exercise answer: yes

Practical question: What do you live on? Unless you have a huge capital loss carryover and are getting your living expenses from sales of assets I have trouble seeing how you live on zero gross income.

1. Do you have to file a return under the given scenario.

Academic answer: Beats me. I know there have been prior discussions here about the effect of capital losses on the filing requirement, but I haven't paid attention.

Practical answer: File. Otherwise the IRS, which won't be aware of the loss carryover without a return, will bother you.

Phil Marti Clarksburg, MD

Yes, I would file if only for the capital loss carry forward.

I am able to live, thus far, on only my Social Security income.

Another trigger for this was that I unexpectedly received 3 checks on Thursday from the Invesco Fair Fund as compensation for their alleged market timing naughtiness.

Several thousand bucks was for my old IRA account. But the check was made out to AIMInvesco for me to redeposit in the IRA. Of course, this would not be takaxable if I roll it over. I have to have the check re-issued so I can roll it over to my IRA at Fido.

However, there were also 2 other checks for smallish amounts. Although the Invesco Fair Fund folkes told me that these were not taxable, and the amounts are not even reported to the IRS, the document at the Invesco Fair Fund web site seems to indicate that some of the payment may be taxable as capital gains and some as interest.

Of course, the capital gains would be eliminated by the losses I can carry forward, and the interest is so small, I do not think that there would be any tax.

All of this triggered me to think that I could apply a $3000 capital gain loss and convert yet another $3000 from the IRA to the Roth.

I've been unusually ill since June 2008 and have not had an opportunity to earn income. In 2008, I spent about $2682 more than my social security income, which I covered from my bank account. In 2009, I expect to spend less than my social security income.

I can do this because I have no mortgage and live as tho I was still in grad school.

I am working on a software project. If I ever get healthy enough to finish, it will likely generate large income.

Of course, once I hit 70.5, I'll have additional income from the MRD from my IRA.

Yes, because your capital loss is NOT part of gross income. Your gross income would be $13,749.00.

Only capital gains (IRC Section 61(a)(3)) are part of gross income. Losses aren't accounted for until AGI (Section 62(a)(3)).

Note that Form 1040, Line 22 doesn't call itself "gross income" but "total income." That's because it isn't gross income as defined in the IRC.

Looks to me like capital gains are reported om line 13, and Roth conversion on line 15, so the "total income" would still be 10749.

To this, I have to add less than $10 of interest income from the Invesco Fair Fund checks. The capital gains from the Invesco Fair Fund would be reported on Schedule D but would be eliminated by my loss carry forward.

Also, I Just remembered that I received a check dated 24 June 2009 for $10.01 from BankOfAmerica Fair Fund on behalf of Janus that has to be reported as capital gains.