Do I Need to File a Tax Return?
People whose income falls below certain levels may not owe any federal income tax, and therefore may not have to file a return. The income limits for 2012 are as follows for each of the filing statuses:
• Single $ 8,699
• Married Filing Jointly $ 16,399
• Married Filing Separately $ 8,699
• Head of Household $ 12,399
If your income is in excess of these amounts you need to file. However, even if you find that your income is under these thresholds, you may want to file a return if:
• You had any income tax withholding on your earnings as you can get these withholdings refunded.
• You are self-employed and had more than $400 in net earnings from your work.
• You are eligible for the Earned Income Tax Credit (EITC). This credit can be refundable which means even if you have paid no taxes, you can get cash back. Click here for a link with more information on EITC eligibility
• You are eligible for the refundable portion of the Child Tax Credit. As with the Earned Income Credit this can be refundable even if you paid no taxes.
The IRS does have a question and answer application that can help you determine whether you need to file. Click Here
Another common question is whether a dependent child needs to file. The answer to this question depends on what kind of income the dependent child has. If your dependent child has a job, any income would be considered earned income. The filing requirement for dependents with earned income is $5,950. Again if they were under this amount it still may be worthwhile to file if they had income tax withheld at either the federal or state level.
There is one other consideration for dependents relating to unearned income. Unearned income includes interest, dividend and capital gain income. If a dependent has unearned income over $950 there is a filing requirement and you may end up having to deal with the “kiddie tax” calculation. If you have a situation such as this we recommend you consult a tax professional.