Individual Tax

Every citizen and residents need to pay individual tax at federal level regardless of where they live.  They must file their income tax return by using the form 1040 or 1040-SR (This form is optional choice for taxpayer whose age are 65 or older). The wages, salaries, renal income, investment earning such as dividends and interests, business income, retirement income and other income they personally earned throughout the year need to be included in their individual tax returns. Most of the states also require filing states’ tax returns. However, Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming have no income tax and no individual returns need to be filed. Some states also levy taxes on certain income, not all. For example, Tennessee has no income tax, but charge a flat 1 to 2% tax rate on income earned from interest and dividends. New Hampshire has no income tax on wages, but the state does charge a 5% tax on income from interest and dividends. There is no local income tax on cities in New Hampshire.

The Nonresident-aliens of U.S. may have to file the returns of income tax if they are doing business in United States during the tax year. Non-resident aliens are taxed on their US-source income and income effectively connected with a US trade or business. The Non-Resident aliens file form 1040-NR.

There are 5 different filing status for individual returns:

Single Filer Status

The taxpayer who is either single, divorced or separated as per state law and it is so as of the last day of the tax-year will be considered as single filer. The person who is widowed or house holder will not fall into category of singe filer for tax purposes.

Married Jointly Filing Status

If you are married and both you and your spouse are agreeing to file, the income tax return jointly. Then you file joint return, it means you jointly file the combined income and deduction.

Married Filing Status Separately

For this status you must be married, and this will be beneficial for you if you want to responsible for your own income tax and it is less than that of you jointly file the returns. When you and your spouse is not willing to file jointly then you should use this filing status.

Head Of Household Filing Status

For this status you must follow the requirements which are:

1-You are unmarried on the last day of the tax-year.

2-You must pay more than the half of the household cost.

3– You need to have the qualified person lives in the home with you for more than half of the year.

Qualifying Widow(r) With Dependent Child Filing Status

A widow(er) can file jointly in the year of their spouse’s death. The qualifying widow(er) has a dependent child and can use the joint tax rates and the highest deduction amount for the next two years after their spouse’s death.

2021 Federal Income Tax Brackets and Rates for Single Filers, Married Couples Filing Jointly, Married Filing Separately Heads of Households