Filing a Tax Return: Who Needs to Do It?
The majority of working Americans are required to file federal and state tax returns. On the other hand, there are a number of individuals who are not legally obligated to file a tax return.
According to the IRS single individuals with an income less that $7,950 are not required to file a tax return. A single individual is classified as an individual who may live on their own or cannot be claimed as a dependant by another taxpayer. A head of household is an individual who provides the main source of income for an unmarried family or household. An individual who can be defined as the head of the household and makes less than $10,250 a year is not required to file a tax return.
Individuals who are married have the option of filing their tax returns jointly or separately. For married couples who have a combined income less than $15,900 they are not required by the IRS to file a tax return. Married couples who wish to file their tax returns separately are required to make more than $3,100 to legally have to file a tax return. With many individuals and parents working from home or running their own business there are additional rules and restrictions that may apply. It is standard procedure that a self-employed individual does not have to file a tax return if their income is less than $600 a year.
For individuals who do not meet the above mentioned requirements provided by the IRS, filing a tax return is completely optional. According to federal and state laws a tax return is may not be required; however, there are some individuals who may benefit by filing their taxes. These benefits include receiving a tax refund. For an easy and quick way for taxpayers to determine whether they should file a tax return a tax estimate should be completed. Tax estimates can be completed by filling out a rough draft of a federal or state tax form, using a free online tax estimating program such as the one found on TaxEngine’s website, or by using an estimation calculator found on many tax software programs.
When using a program or free service to estimate a potential tax return be sure to consider any potential tax credits or deductions. The Earned Income Tax Credit allows parents to claim their children and they receive a tax credit for it. The IRS lists the standard tax credit as $4,300 for two children or more and $2,604 for one child. Individuals who are not required to file a tax return are still eligible to receive the tax credit; however, the proper tax forms must be filed by the April 15th tax deadline.
Individuals may also determine if they are required to file a federal or state tax return by reading the instruction booklet that comes with most tax forms. Many of these tax booklets have a section that gives important information pertaining to laws or guidelines that may or may not require them to file a tax return.
As previously stated, an individual who does not meet the state and federal requirements for filing a federal or state tax return is not legally obligated to do so. There are a number of benefits to taking the time to estimate a potential tax return refund. Everyone loves receiving money and they should take the appropriate steps to get it if they are entitled to it.