The reality is that most of us have to file a tax return. And we must do so this year by April 17.
The only consolation is that most who do file a return get a refund.
But before you mess with all the forms and schedules, make sure you must send the Internal Revenue Service something. If a few cases, a return isn't required.
The IRS has three charts to help us determine our filing responsibilities.
Chart A is, according to the IRS, for most people. It breaks down tax filing requirements based on age, income and filing status:
Chart B is for children and other dependents. This table will be of interest to students whose parents can claim them as dependents. You'll take into account here unearned income (investments, etc.) as well as earned income (wages, etc.) amounts. Older individuals who are receiving help from relatives also should look at these filing requirements.
And Chart C covers, as the IRS puts it, "other situations when you must file." These include the payment of Social Security and Medicare taxes on tips that weren't reported to an employer (oops!) or wages from an employer who didn't take out payroll withholding for FICA. You'll also need to file if you were self-employed and your net earnings were $400 or more.
Not required, but recommended: But some folks who don't have to fle a 1040 or 1040A or 1040EZ might want to think about doing so. Really.
It's the only way to get back money paid the IRS. This is the case if you:
- had income tax withheld from your paycheck, but then didn't earn enough to require filing;
- made estimated tax payments; or
- had a prior year overpayment applied to the current tax year.
But the IRS won't send you back these overpayments until you tell the agency about them via a tax return.
Refundable credit collection: You also might be able to get a refund even if you aren't technically required to file a tax return because you're eligible for a tax credit or two that is refundable.
As the name indicates, these tax credits will get you money back from the feds even if you don't owe anything.
That could be the case with 2011 taxes if you qualify to claim:
- the Earned Income Tax Credit (EITC),
- the Additional Child Tax Credit,
- the American Opportunity Credit,
- the First-time Homebuyer Credit,
- the Adoption Credit,
- the Health Coverage Tax Credit,
- a credit for paying alternative minimum tax in a prior year, or
- a credit for federal fuels tax.
So double check your tax situation.
Sure, it's great to not have to mess with tax forms and figures. But if they can get you back some money from Uncle Sam, then it's usually worth the hassle of filing a tax return.
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