INDIVIDUAL TAX RETURN 1040

AM I REQUIRED TO FILE 1040?

Minimum to File

· If you file Single and you are under 65 by December 31, and your minimum gross income is $ 15,750 (2025). If you are 65 or older, your gross earned income must be at least $ 17,750 (2025), plus a new $6000 deduction (2025 to 2028).
· If you file as Married Filing Jointly, the minimum to file is $ 31,500 (2025) gross income. But if you file as Married Filing Separately, the minimum limit is $ 5 of gross income. . If you file as Head of Household, the minimum to file is $23,625.
· On the other hand, you are required to file the return if your net earnings from self-employment were at least $400, or if you owe taxes on unreported tips, retirement account distributions, capital gains, etc, or if you got advance premium tax credits (health insurance subsidies) or if you want to claim a refund or credit (like Earned Income Tax Credit or Child Tax Credit).

WHAT DEDUCTIONS CAN I APPLY?

Standard deductions (2025):
Single and Married Filing Separately $16, 100 – Married Filing Jointly $32,200 – Heads of the Household $24,150.

Additional Deductions for Age/Blindness (2026):

• Single/HoH: An extra $2,050 if 65 or older or blind (or $4,100 if both).
• Married Filing Separately/Jointly: An extra $1,650 per qualifying person if 65 or older or blind (or $3,300 if both). 

Foreign Earned Income Exclusion
Most commonly used exclusion for expats: $130,000 (2025)
Only from earned income.
You must live in another country.

Foreign Tax Credit
Let’s you deduct the amount of Foreign Taxes paid from the U.S. Tax liability.
If paid foreign taxes at higher rate, you can carry forward the excess paid for use in the subsequent 10 years.

Child Tax Credit
For children, dependents, up to 17 years old.
From 2018 to 2020 $1,400 refund ($2,000 Credit)
In 2023 was a refundable credit of $1,500 if younger than 17 and this year 2024 will be $2,000 but only $1,400 is refundable . In 2025, the credit is $2200, but only $1700 is refundable

ARE THERE ANY PENALTIES FROM THE IRS ON THE FORM 1040?

There are two types of penalties: failure-to-file and failure-to-pay. In any case, paying taxes must always be done before April 15; for filing late you can take in consideration the requested extensions, which do not apply to the failure-to-pay penalty.

The failure-to-file penalty is 5% of your balance due for every month (or part of a month) in which your taxes go unpaid. The amount you owe for this penalty will be reduced by the amount you owe for the failure-to-pay penalty. The maximum amount of this penalty is 25% of your unpaid taxes.

The failure-to-pay penalty is 0.5% of your balance due for each month (or part of a month) in which your taxes remain unpaid. This penalty will not exceed 25% of your unpaid taxes.

If both penalties apply to you during the same month, the failure-to-file penalty is reduced by 0.5% per month. The 25% cap applies to both penalties together.

HOW MUCH DOES IT COST TO HAVE FORM 1040 PREPARED ?

The fee is for a current year Individual Federal Tax Return which includes the following Forms: 1040, 2555, 1116, Sch. A, B, C, D, and Sch. E, Schedules K-1’s, and Bank Interest/Dividend entries, and all brokerage transactions. We do not include Form 8938. Please, let us know whether you are required to file Form 8938, the principal document for complying with the FACTA regulations and we will prepare it for a fee.

Do you need to amend your previously filled tax Returns? Only if we have already prepared the original 1040, the fee will be €330,00. For all our clients who have not filed their returns before June 1^st, we will provide a 4-month automatic extension (until October 15^th)

Other obligatory forms and schedules

You can view the remaining fees for other required Forms and Schedules on the Fees – US Tax Consultants page. We will inform you in advance of any additional obligations and the estimated cost, if necessary. 

WHAT DO I HAVE TO SEND YOU SO YOU CAN PREPARE OUR U.S. TAX RETURN?

Documentation
We always need a copy of your your most recent tax return, a copy of your U.S. Passport, and a copy of your Social Security Card, all up to date. We also need all W2 and 1099 froms your U.S. payers and/or financial entities in the U.S. and other countries.
If you are fiscal resident of Spain, we will also need a copy of your fiscal data issued after April 10 by the Spanish Tax Agency and your Spanish Tax Return, filed whenever it is filed.
If you have a property for rent, please use our Excel help, which you can download  HELPRENT
You can find the complete list of required documents at the List of required documents.

Uploading
It is essential that you upload the documentation to us via our website’s secure, encrypted file transfer system in the Client’s Area.