A frequent question asked is whether or not an individual needs to file a tax return. There are two issues associated with this question:

  • Is there is a requirement to file?
  • Should the taxpayer file even when there isn’t a requirement to file?

The answers to these two questions are quite different. You must file a tax return if your income is above a certain level. The amount varies depending on your filing status, age, and the type of income you receive. Different filing thresholds may apply for federal and state purposes. The table below illustrates the general filing requirements based on age and income for 2011.

For example, for 2011, a married couple both under age 65 generally are not required to file a federal return until their joint income reaches $19,000. However, self-employed individuals generally must file a tax return if their net income from self-employment was at least $400. There are special rules for children or other individuals who are, or could be, claimed as a dependent by someone else.

Even if you don’t have to file a federal return, here are six reasons why you may want to file:

  • Federal Income Tax Withheld. If you are not required to file, you should file to get money back if federal income tax was withheld from your pay, if you made estimated tax payments, or if you had a prior year overpayment applied to this year’s tax.
  • Earned Income Tax Credit. You may qualify for the Earned Income Tax Credit, or EITC, if you worked but did not earn a lot of money. EITC is a refundable tax credit, meaning you could qualify for a tax refund.
  • Additional Child Tax Credit. This credit may be available to you if you have at least one qualifying child and you did not get the full amount of the Child Tax Credit.
  • Refundable Education Credit. Forty percent of the American Opportunity Credit may be refundable (excess over the tax liability can result in a refund).
  • Claimed or Carried-over Tax Credits
  • Claimed or Carried-over Losses

If in doubt, please call this office to see if you are required to file or should file a tax return for 2011.

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