We have recently discussed 5 Non Monetary Deductions For Your Tax Return and were wondering about those of you who may not have to file a tax return. Is it worth the effort and money, should you choose to hire a bookkeeper or accountant to help? While there is no one solid answer on whether this is worth the effort or not, here are 6 reasons to file a tax return even if you don’t have to.
1. Do You Have to File a Tax Return?
Did you know that even if you earned income in the past year, you may not have to file a tax return? You are exempt from being forced to if you meet the following criteria and are under 65 years of age:
- You made less than $10,350 in gross income and are single
- You made less than $4,050 and are married and filing separately
- You made less than $20,700 and are married and filing jointly
- You made less than $13,350 and are the head of household
- You made less than $16,650 and are a qualified widow with at least one dependent child
Of course, those who 65 years of age and over are allowed not to file a tax return if they meet the following criteria:
- You made less than $11,900 in gross income and are single
- You made less than $4,050 and are married and filing separately
- You made less than $23,200 and are married and filing jointly if both spouses are over 65
- You made less than $21,950 and are married and filing jointly and one spouse is over 65
- You made less than $17,900 and are the head of household
- You made less than $17,900 and are a qualified widow with at least one dependent child
Have more questions on if you are required to file a tax return? Use the IRS’s own eligibility calculator found here. You’ll need to know your filing status (single, head of household, married filing jointly/separately, etc.), how much federal income tax has been withheld from your pay, and other basic information.
2. Those Who Qualify for the EITC
The Earned Income Tax Credit, also known as the EITC, is designed to give tax relief for those who earn less. It is essentially a tax credit if you earned under a certain amount. For this reason alone, it is worth the effort for low earners to file in order to receive this tax credit. Those who meet the criteria above usually qualify for the EITC.
3. Do You Qualify for the Chid Tax Credit?
Similar to the above, those who earn too little but have one or more dependent children are eligible for this tax credit, which can make the effort to file a tax return worth it. This includes any costs associated with preparing it.
4. If You Have Health Insurance Under the Affordable Healthcare Act (ACA)
Did you buy insurance through the market place, aka healthcare.gov? You probably did so because you qualified for the tax subsidies associated with it. Most who apply for this insurance will receive the credit in advance when they purchase it online. But those who paid the full premiums must file a tax return in order to get the credits.
5. If You Qualify for the American Opportunity Tax Credit
Those who took collegiate level classes on a full or part time basis often don’t earn large amounts of income, which is why they may not have to file a tax return. However, the education related tax break can give those who qualify a credit of up to $2,500. This includes the cost of tuition, books, lab fees, and other costs associated with education. A portion of the tax credit up to $1,000 may be refundable to some qualifying filers.
6. If You Have Paid Estimated Taxes or Have Had Taxes Withheld
Those who earn income through a paycheck may notice that taxes are usually withheld for tax purposes on their stubs. When these funds are automatically withdrawn, they are estimated for your tax burden. They are not necessarily what you owe. In many cases, those who estimate how much you will owe in taxes, will over estimate. This means that it is likely you will be owed a refund even if you don’t have any credits or deductions. This refund can even offset the cost to file.
File a Tax Return in Houston
If you are wondering if you should file a tax return in Houston or have questions on how, feel free contact us for help.