Your income

Do You Need to File a Tax Return?

Do You Need to File a Tax Return?

Too many assume they are not required to file a tax return. Knowing that it is possible to receive a refund even if no tax is due, should be reason enough to review your situation. Here are some tips.

Too many taxpayers assume they are not required to file a tax return and end up losing a potential refund. To help ensure this does not happen to you, here are some common things to help you decide whether a review of your situation is in order.

  1. Know the triggers. You are required to file a tax return based on your income, filing status, and age. If your income is above the amounts below, you are generally required to file a tax return.
FILING REQUIREMENTS
Status: Age* Gross Income
Single
Under 65
65 and older
$10,000
11,500
Married filing jointly (MFJ)**
Both under 65
One 65 or older
Both 65 or older
20,000
21,200
22,400
Married filing separately
Any age
3,900
Head of Household
Under 65
65 and older
12,850
14,350
Qualifying Widow(er) with dependent child
Under 65
65 and older
16,100
17,300
* If you were born on 1/1/49, you are considered to be age 65 at the end of 2013.

** If you did not live with your spouse at the end of 2013 (or on the date your spouse died) and your gross income was at least $3,900 you must file a return regardless of age.

  1. Tax is withheld. If your employer or other supplier withheld money from you and provided it to the federal government, you need to file a tax return to receive any applicable refund. This is also true if you made any estimated tax payments or applied overpayments from last year’s tax return to this year’s tax obligation.
  2. The Earned Income Tax Credit (EITC). If you worked and made less than $51,567 you may be eligible for an EITC-related tax refund, even if you owe no tax.
  3. Education related credits. If you are a student or pay/support a student, there are numerous tax incentives available to you. One of the credits, American Opportunity Credit, is refundable up to $1,000 even if you owe no tax.
  4. Health Coverage Tax Credit. In 2013 there is a health insurance premium credit called the Health Coverage Tax Credit (HCTC). If you received Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty you may be eligible to receive a credit for up to 72.5% of your health insurance premiums. In 2014 there is also a new Health Insurance Premium Credit that may require you to file a tax return when you did not do so in the past.
  5. You took plan distributions. Remember if you withdraw funds from a pre-tax retirement plan or health saving account you may now owe tax on this ordinary income.
  6. You received informational tax returns. In most cases, if you receive 1099s or W-2s you will want to ensure you file a tax return to avoid an IRS matching program audit. This is especially true if you have CD’s that are rolled over. These 1099s can often trigger a false read of your taxable income by the IRS. Something easily fixed by filing a tax return.
  7. Special Situations. There are also other situations that may require filing a tax return. Some of the more common:
    • You have unreported tips
    • You have self-employment income in excess of $400
    • You received group-term life insurance proceeds
    • You owe taxes on other income received
    • You are repaying a first-time home buyer credit

If any of the above apply to you, it may make sense to review your situation.