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Taxes 2015

More information can be found here: 2015 Tax Guide for Peace Corps Volunteers

Frequently Asked Questions

Do I have to file a Federal Tax Return

If your total income was above these amounts, you MUST file a tax return. Use your age on December 31, of the previous year. 
 Filing Status  under 65  65 & over  both spouces 65 & over  not living with spouse at end of year
 Married filing separately  $4000  $4000    
 Single  $10.300  $11,850    
 Head of household  $13,250  $14,800    
 Qualified window(er)  $16,600  $17,850    
 Married filing jointly  $20,600  $21,850  $23,100  $4000

Do I have to file a state tax return?

If your only income is from Peace Corps, you may not need to file a state return. Generally, if you file as a non-resident or part-year resident, you can exclude income earned outside that state. However, each state has its own rules for who must file a tax return. Consult your state income tax authority for more information. Most states have online guides for taxpayers.

Even though I don’t have to file a tax return, should I file?

You may want to file, even if you are not required to file. For Volunteers planning to enroll in graduate school following their Peace Corps service, it is often helpful to file state taxes each year of your service. This will assist you when it comes to documenting your in-state status for admissions and tuition payments.

You risk losing your refund if you don't file your return. If you are due a refund for withholding or estimated taxes, you must file your return to claim it within 3 years of the return due date. The same rule applies to a right to claim tax credits such as the Earned Income Credit.

When should I file my return?

April 18, 2016 – If you are living in the US on this date, you must file your return and pay any tax, if applicable, by this date.

June 15, 2016 – If you are living outside of the US on April 18th, you must file your return and pay any tax, if applicable, by this date.

If you are a living outside of the United States and Puerto Rico and your main place of business or post of duty is outside of the United States and Puerto Rico, you are allowed an automatic 2–month extension until June 15 to file your return and pay any tax due. If you use this automatic 2–month extension, you must attach a statement explaining the above situation which qualifies you for the extension.

Generally, interest accrues on any unpaid tax from the due date of the return until the date of payment in full. The interest rate is determined quarterly and is the federal short-term rate plus 3 percent. Interest compounds daily.

In addition, if you file a return but don't pay all tax shown as due on time, you will generally have to pay a late payment penalty. The failure to pay penalty is one-half of one percent for each month, or part of a month, up to a maximum of 25% of the amount of tax that remains as unpaid from the due date of the return until paid in full. The one-half of one percent rate increases to one percent if the tax remains unpaid 10 days after the IRS issues a notice of intent to levy property. If you file your return by its due date and request an installment agreement, the one-half of one percent rate decreases to one-quarter of one percent for any month in which an installment agreement is in effect. Be aware that the IRS applies payments to the tax first, then any penalty, then to interest. Any penalty amount that appears on your bill is the total amount of the penalty up to the date of the notice, not the penalty amount charged each month.

If you owe tax and don't file on time, there is a penalty for not filing on time. The failure to file penalty is usually five percent of the tax owed for each month, or part of a month that your return is late, up to a maximum of 25%. If your return is over 60 days late, there is also a minimum penalty for late filing; it is the lesser of $135 or 100 percent of the tax owed unless your failure to file was due to reasonable cause and not willful neglect

Generally, there are no penalties for late filing if you are due a refund or owe no taxes.

More information can be found here: 2015 Tax Guide for Peace Corps Volunteers
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