Do I Need To File A Tax Return? It Depends Upon A Variety Of Factors.

One question I have seen people coming to this site asking via the search engines is whether or not they’re required to file a tax return.  I’m assuming these are mainly students or people living on a fixed income who believe they’re making so little that they won’t need to file.

The thing is, for some folks, even if they’re not making enough to file taxes, they still may be in a situation where they’ll want to file.

Requirements For Filing: Income, Filing Status, Age, Dependents

Most people are required to file taxes if their income is above a certain level. If you’re a single filer, that income level is usually somewhere just over $9,000.

What the level is for your situation, however,  may vary as it depends largely upon your filing status, your age, whether you have dependents and the type of income that you receive.

To go through a questionnaire to figure out if you’ll need to file in your particular situation, head on over to the IRS site and go through their “Do You Need to File a Federal Income Tax Return? ” questionnaire via the Interactive Tax Assistant.  That should give you an idea of if you’re required to file.

You can also download your instructions for Form 1040, 1040A or 1040EZ to get specific details that could aid in determining if you need to file a tax return with the IRS this year.

So the basic answer to whether you need to file is, “it depends.”

Reasons To File Even If You’re Not Required

In some situations people may want to go through with filing even if they’re not required because they may be entitled to a refund of taxes paid, or they may qualify for a refundable tax credit of some kind.

Found out that you may not need to file for 2011?  You may want to if you’re eligible for refundable tax credits like the following:

1. Federal Income Tax Withheld Did you make estimated tax payments, have income tax withheld by an employer or have a prior year overpayment applied to your current year’s tax ?  You may want to file to claim a refund.

2. Earned Income Tax Credit  Some people who worked but didn’t earn a lot of money may still qualify for the EITC.  It’s a refundable tax credit, but you must file to claim it.

3. Additional Child Tax Credit If you didn’t get the full about of the Child Tax Credit and have at least one qualifying child, you may want to file to get this refundable credit.

4. American Opportunity Credit Students in their first four years of postsecondary education may qualify for as much as $2,500 through this credit. Forty percent of the credit is refundable so even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student.

5. Adoption Credit If you adopted a child you may be able to claim and receive qualified expenses you paid to adopt an eligible child.

6. Health Coverage Tax Credit From the IRS: Certain individuals who are receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a 2011 Health Coverage Tax Credit.

So basically it comes down to this: Even if you aren’t required to file a tax return, for many people it will pay off to file anyway especially if they’re eligible to receive a refundable tax credit like the ones listed above, or others that we neglected to mention.  For more information about credits you may be eligible for, visit www.irs.gov.

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