Why You May Not Have to File A Tax Return This Year
Editor's Note: This article is part of our 2014 Tax Tips series. Robert Flach is an expert with more than 40 years of experience as a tax professional and also blogs as The Wandering Tax Pro .
NEW YORK ( MainStreet) Do you have to file an income tax return this year?
Generally you must file a 2013 federal income tax return Form 1040 or Form 1040A if your gross income exceeds the total of your standard deduction and personal exemption, unless you are filing separately.
This translates to
- $10,000 if filing as Single,
- $20,000 if Married filing a joint return,
- $12,850 if filing as Head of Household, and
- $ 3,900 if Married filing separately
There are special rules for dependents.
The IRS tells us that "Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax."
If your gross income falls under the filing threshold, you are still required to file a federal income tax return if you are liable for other taxes, such as
- Employment taxes on household employees (Schedule H).
- Self-employment tax (Schedule SE); you must file a tax return if you had net earnings from self-employment (Schedule C, Schedule C-EZ or Form K-1) of at least $400.
- The premature withdrawal 10% penalty tax and other additional taxes on IRAs and qualified retirement plans (Form 5329).
- Repayment of the First-Time Homebuyer Credit (Form 5405).
- Unreported Social Security and Medicare tax on tips you did not report to your employer (Form 4137) or on misclassified wages (Form 8919).
- Uncollected payroll taxes on taxable group-term life insurance provided by a former employer.
Even though you are not required to file a tax return, there are several reasons why you should.
Obviously if you had income tax withheld from W-2 or other income, you should file a return to get a refund.
You should also file a return in you are eligible for the refundable Earned Income Tax Credit, Additional Child Tax Credit or American Opportunity Credit.
The Earned Income Tax Credit is a refundable tax credit for low-income workers that is based on the amount of earned and unearned income, the age and filing status, and the number of qualifying dependent children of the person claiming the credit.
The refundable Additional Child Tax Credit may be available if you have qualifying dependent children and more than $3,000 of earned income.
The American Opportunity Credit applies to expenses for college tuition, fees, books and supplies and materials in excess of any scholarships and grants received. 40% of the credit may be refundable.
If you receive a Form 1099-B to report gross proceeds from the sale of investments in excess of your gross income threshold, regardless of whether or not you have a net gain or loss from the transactions, you should file a Form 1040 to avoid a possible notice from the IRS.