Do you have to file a tax return?

It's that season of the year, that dreaded one following the holiday season... Tax Season.  Every year about this time we begin to get lots of calls and emails from students, retirees, etc. all asking, "Do I need to file a tax return this year?"

Well, besides just income level there are plenty of reasons why you may need -- or even want to -- to file a tax return.

You must file a tax return if your income is above a certain level. The amount varies depending on filing status, age and the type of income you receive. Here are the general guidelines.

  • Self-employed, any age: $400
  • Children and Teens classified as a dependent: $5,700
  • Single, under 65: $9,350
  • Single, over 65: $10,750
  • Married, filing jointly, both spouses under 65: $18,700
  • Married, filing jointly, one spouse over 65: $19,850
  • Married, filing jointly, both spouses over 65: $20,900
  • Married, filing separately, any age: $3,650

Even if you don’t have to file, here are eight reasons why you may want to file:

  1. 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 or retirement, you made estimated tax payments, or had a prior year overpayment applied to this year's tax.

  2. Making Work Pay Credit; You may be able to take this credit if you have earned income from work. The maximum credit for a married couple filing a joint return is $800 and $400 for other taxpayers.

  3. Government Retiree Credit; You may be eligible for this credit if you received a government pension or annuity payment in 2009. However, the amount of this credit reduces any making work pay credit you receive.

  4. Earned Income Tax Credit (EITC); You may qualify for EITC if you worked, but did not earn a lot of money. EITC is a refundable tax credit; which means you could qualify for a tax refund.

  5. 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.

  6. Refundable American Opportunity Credit; This education tax credit is available for 2009 and 2010. The maximum credit per student is $2,500 and the first four years of post-secondary education qualify.

  7. First-Time Homebuyer Credit; The credit is a maximum of $8,000 or $4,000 if your filing status is married filing separately. The credit applies to homes bought anytime in 2009 and on or before April 30, 2010. However, you have until on or before June 30, 2010, if you entered into a written binding contract before May 1, 2010. If you bought a home after November 6, 2009, you may be able to qualify and claim the credit even if you already owned a home. In this case, the maximum credit for long-time residents is $6,500, or $3,250 if your filing status is married filing separately.

  8. Health Coverage Tax Credit; Certain individuals, who are receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a Health Coverage Tax Credit worth 80 percent of monthly health insurance premiums when you file your 2009 tax return.

As you can see, there is no one correct answer. If in doubt give us or your tax professional a call.

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I would be honored to chat with you about your accounting, tax and finances whether personal or business. I offer a Free, No-Obligation consultation (at your place or mine). During our meeting we will discuss your concerns and questions and let you know how we can help you and our costs. My consultations are not just sales pitches, I will offer you some solid ideas and solutions to help you right off the bat. To schedule a consultation at a time convenient for you, call me at any of offices or call me toll-free at (888) 758-5966 or click here to email me.

I hope you found this information useful. I am excited by the fact that my practice is growing. The key to my firm’s growth — and probably your business too — is referrals from satisfied clients, customers and friends like you. If you know of a friend, colleague or business that would like to grow with us please let me know.