Basic Concepts for U. S. Income Taxes
“Resident” taxpayers (U.S. citizens,
green-card holders, most students who have
been in U.S. for any part of more than 5 years)
 File IRS Form 1040, 1040A, or 1040EZ
 Are taxed on worldwide income
 Get exemptions for self and dependents
 Can take standard deduction
 Can claim various credits
“Nonresident” taxpayers (all others)





File IRS Form 1040NR or 1040NR-EZ
Are taxed only on U.S.-source income
Generally get exemption for self only
Generally must itemize deductions
Can claim only certain credits
Dependents
 Certain children under age 19 (24 if full-time
students) or permanently disabled, who lived
with taxpayer for at least half the year and did
not provide more than half of their own support
 A person who was a member of taxpayer’s
household for the whole year or who was a
relative listed in the tax guide, who had gross
income less than $4,000 in 2015 and for whom
taxpayer provided more than half of the
person’s total support during the calendar year
Income
 Excluded or exempt from taxation
Not reported (e.g.,gifts, insurance proceeds;
foreign-source income and U.S. bank
interest received by nonresidents);
fellowship funds used by resident students to
pay tuition or fees
Reported (e.g., interest on municipal bonds;
income that’s exempt under a tax treaty;
fellowship funds used by nonresident
students to pay tuition or fees)
 All other (“Gross Income”)
Earned (e.g., wages; self-employment)
Unearned (e.g., investment income)
Adjustments to income
Items that can be subtracted from Gross
Income before taking either the standard
deduction or itemized deductions
Adjusted Gross Income (AGI)
Gross Income minus Adjustments
Deductions
 Itemized Deductions
 Standard Deduction (instead of itemizing)
(for single taxpayer, $6,300 for 2015)
Exemptions
Amount not taxed ($4,000 for 2015) for taxpayer
(and, if allowed, for spouse and each dependent)
Taxable Income
Adjusted Gross Income minus Deductions and
Exemptions
Tax
Tax tables show amount of tax for each filing
status and amountl of Taxable Income.
Credits
Items that can be subtracted from Tax
 Nonrefundable credits can reduce the amount
of tax to zero but not below.
 Refundable credits can reduce the amount of
tax below zero, resulting in a payment to the
taxpayer.
State Income Tax return is prepared using
figures from Federal. tax return,
Keep a copy of your returns
and all supporting documents
(Forms W-2, 1095, 1098, 1099, etc.,
and documentation for any
adjustment, deduction, or credit)
with your other permanent records.
 Photocopy signed returns prepared on paper.
 Download, save, and print a copy of returns
prepared electronically. Save a backup copy on
removable storage medium (portable hard disk,
CD-ROM, flash drive, etc.).
File your Federal income-tax return by
mail (any taxpayer) or electronically (resident
taxpayers) on or before April 18, 2016.
File your State return electronically or
by mail on or before the due date:
 Maryland income-tax returns: April 18, 2016
 District of Columbia income-tax returns:
April 18, 2016:
 Virginia income-tax returns: May 2, 2016