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Publication 334

Income Tax(p6)

This part explains whether you have to file an income tax return and when you file it. It also explains how you pay the tax.

Do I Have To File an Income Tax Return?(p6)

You have to file an income tax return for 2016 if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Instructions for Form 1040.

How Do I File?(p6)

File your income tax return on Form 1040 and attach Schedule C or Schedule C-EZ. Enter the net profit or loss from Schedule C or Schedule C-EZ on page 1 of Form 1040. Use Schedule C to figure your net profit or loss from your business. If you operated more than one business as a sole proprietorship, you must attach a separate Schedule C for each business. You can use the simpler Schedule C-EZ if you operated only one business as a sole proprietorship, you did not have a net loss, and you meet the other requirements listed in Part I of the schedule.

IRS e-file (Electronic Filing)(p6)

You may be able to file your tax returns electronically using an IRS e-file option. Table 1-1 lists the benefits of IRS e-file. IRS e-file uses automation to replace most of the manual steps needed to process paper returns. As a result, the processing of e-file returns is faster and more accurate than the processing of paper returns. As with a paper return, you are responsible for making sure your return contains accurate information and is filed on time.
Using e-file does not affect your chances of an IRS examination of your return.
You can file most commonly used business forms using IRS e-file. For more information, visit

Electronic signatures.(p6)

Paperless filing is easier than you think and it's available to most taxpayers who file electronically—including those first-time filers who were 16 or older at the end of 2016. If you file electronically using tax preparation software or a tax professional, you will sign your return using the Self-Select PIN (personal identification number) Method for e-file. If you are married filing jointly, you and your spouse will each need to create a PIN and enter these PINs as your electronic signatures.
To create a PIN, you must know your adjusted gross income (AGI) from your originally filed 2015 income tax return (not from an amended return, Form 1040X, or any math error notice from the IRS). You will also need to provide your date of birth (DOB). Make sure your DOB is accurate and matches the information on record with the Social Security Administration before you e-file. To do this, check your annual Social Security Statement.
With a Self-Select PIN, there is nothing to sign and nothing to mail—not even your Forms W-2. For more details on the Self-Select PIN Method, visit

State returns.(p7)

In most states, you can file an electronic state return simultaneously with your federal return. For more information, check with your local IRS office, state tax agency, tax professional, or


You can have your refund check mailed to you, or you can have your refund deposited directly to your checking or savings account.
With e-file, your refund will be issued in half the time as when filing on paper. Most refunds are issued within 3 weeks. If you choose Direct Deposit, you can receive your refund in as few as 10 days.
Offset against debts.(p7)
As with a paper return, you may not get all of your refund if you owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support. You will be notified if the refund you claimed has been offset against your debts.

Refund inquiries.(p7)

You can check the status of your refund if it has been at least 24 hours (4 weeks if you mailed a paper return) from the date you filed your return. Be sure to have a copy of your tax return available because you will need to know the filing status, the first social security number shown on the return, and the exact whole-dollar amount of the refund. To check on your refund, do one of the following.
Due to changes in the law, the IRS can't issue refunds before February 15, 2017, for returns that claim the earned income tax credit or additional child tax credit. This applies to the entire refund, not just the portion associated with these credits.

Balance due.(p7)

If you owe tax, you must pay it by April 18, 2017 to avoid late-payment penalties and interest. You can make your payment electronically by scheduling an electronic funds withdrawal from your checking or savings account or by credit card.

Using an Authorized IRS e-file Provider(p7)

Many tax professionals can electronically file paperless returns for their clients. You have two options.
  1. You can prepare your return, take it to an authorized IRS e-file provider, and have the provider transmit it electronically to the IRS.
  2. You can have an authorized IRS e-file provider prepare your return and transmit it for you electronically.
You will be asked to complete Form 8879, IRS e-file Signature Authorization, to authorize the provider to enter your self-selected PIN on your return.
Depending on the provider and the specific services requested, a fee may be charged. To find an authorized IRS e-file provider near you, go to

Using Your Personal Computer(p7)

A computer with Internet access is all you need to file your tax return using IRS e-file. When you use your personal computer, you can e-file your return from your home any time of the day or night. Sign your return electronically using a self-selected PIN to complete the process. There is no signature form to submit or Forms W-2 to send in.

Free software options for doing your taxes. (p7)

If your adjusted gross income was $64,000 or less in 2016, you can use free tax software to prepare and e-file your tax return. If you earned more than $64,000, you can use Free File Fillable Forms.
Free File. (p7)
This public-private partnership, between the IRS and tax software providers, makes approximately a dozen brand name commercial software products and e-file available for free. Just visit for details. You can review each software provider's criteria for free usage or use an online tool to find which free software products match your situation. Some software providers offer state tax return preparation for free.
Free File Fillable Forms.(p7)
The IRS also offers electronic versions of IRS paper forms that also can be e-filed for free. Free File Fillable Forms is best for people experienced in preparing their own tax returns. There is no income limitation to using these forms. Free File Fillable Forms does basic math calculations. It supports only federal tax forms.

Filing Through Employers and Financial Institutions(p7)

Some businesses offer free e-file to their employees, members, or customers. Others offer it for a fee. Ask your employer or financial institution if they offer IRS e-file as an employee, member, or customer benefit.

Free Help With Your Return(p7)

Free help in preparing your return is available nationwide from IRS-trained volunteers. The Volunteer Income Tax Assistance (VITA) program is designed to help low-income taxpayers, and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 or older with their tax returns. Some locations offer free electronic filing.

Table 1-1. Benefits of IRS e-file

AccuracyYour chance of getting an error notice from the IRS is significantly reduced.
SecurityYour privacy and security are assured.
Electronic signaturesCreate your own personal identification number (PIN) and file a completely paperless return through your tax preparation software or tax professional. There is nothing to mail.
Proof of acceptanceYou receive an electronic acknowledgment within 48 hours that the IRS has accepted your return for processing.
Fast refundsYou get your refund faster with Direct Deposit.
Free Internet filing optionsUse to access commercial tax preparation and e-file services available at no cost to eligible taxpayers.
Electronic payment optionsConvenient, safe, and secure electronic payment options are available. E-file and pay your taxes in a single step. Schedule direct payment from your checking or savings account (up to and including April 18, 2017) or pay by debit or credit card.
Federal/State filingPrepare and file your federal and state tax returns together and double the benefits you get from e-file.

When Is My Tax Return Due?(p8)

Form 1040 for calendar year 2016 is due by April 18, 2017. If you use a fiscal year (explained in chapter 2), your return is due by the 15th day of the 4th month after the end of your fiscal year. If you file late, you may have to pay penalties and interest.
If you cannot file your return on time, use Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, to request an automatic 6-month extension. For calendar year taxpayers, this will extend the tax filing due date until October 15. Filing an extension does not extend the time to pay your taxes, only the time to file the tax return.

How Do I Pay Income Tax?(p8)

Federal income tax is a pay-as-you-go tax. You must pay it as you earn or receive income during the year. An employee usually has income tax withheld from his or her pay. If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. You generally have to make estimated tax payments if you expect to owe taxes, including self-employment tax (discussed later), of $1,000 or more when you file your return. Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay the tax. If you do not have to make estimated tax payments, you can pay any tax due when you file your return. For more information on estimated tax, see Pub. 505.

What are my payment options?(p8)

You can pay your estimated tax electronically using various options. If you pay electronically, there is no need to mail in Form 1040-ES payment vouchers. These options include:
  1. Paying electronically through the Electronic Federal Tax Payment System (EFTPS).
  2. Paying with Direct Pay by authorizing an electronic funds withdrawal when you file Form 1040 electronically.
  3. Paying by credit or debit card over the phone or by Internet.
Other options include crediting an overpayment from your 2016 return to your 2017 estimated tax, or mailing a check or money order with a Form 1040-ES payment voucher.


  1. To enroll in EFTPS, go to or call 1-800-555-4477.
  2. When you request a new EIN you may be automatically enrolled in EFTPS.
  3. Benefits of EFTPS:
    1. The chance of an error in making your payments is reduced.
    2. You receive immediate confirmation of every transaction.

Penalty for underpayment of tax.(p8)

If you did not pay enough income tax and self-employment tax for 2016 by withholding or by making estimated tax payments, you may have to pay a penalty on the amount not paid. The IRS will figure the penalty for you and send you a bill. Or you can use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, to see if you have to pay a penalty and to figure the penalty amount. For more information, see Pub. 505.