The world of taxes can be confusing and, many times, you are going to discover that there are many different things that you may want to work out as a result of those efforts. How do you know that you’re doing what makes the most sense in that regard? Are you going to be able to sit here and work out what you need? And do you have to file taxes? Here are some of the regulations that you may want to consider.
You don’t have to file Federal Taxes if* (Always check state and local to make sure that you aren’t missing out on their requirements it varies based on your area):
– Self- employed: You made less than $400 out of being self-employed.
– Single or married, “normal” employment, dependent: $950 unearned income, $5,700 earned income**
– Single, age 65 or older or blind, dependent: $2,350 unearned (unless you are both, then it’s $3,750), $7,100 earned ($8,500 if both)
– Married, age 65 or older or blind, dependent: $2,050 unearned (unless both, $3,150), $6,800 earned ($7,900 if both)
– Single , under 65: $9,350
– Single, 65 or older: $10,750
– Head of household, under 65: $12,050
– Head of Household, over 65: $13,450
– Married, joint filing, both spouses under 65: $18,700
– Married, joint filing, one spouse over 65: $19,800
– Married, joint filing, both spouses over 65: $20,900
– Married, filing separately, any age: $3,650
*These totals are from an annual publication known as Publication 501 released by the IRS.
**Unearned income = interest, capital gains, dividends, unemployment, social security, pension, trusts.
Earned income = Salaries, Wages, tips, taxable scholarships/fellowships.
But you know what, even if you are someone that doesn’t really fit into these categories, you probably should file taxes. Why?
– The government may owe you money. If you work a job where your yearly income is low, you may end up getting all of the money that you paid into taxes back during the income tax season.
– You probably have to file state or local taxes anyway. If this is the case, you may as well do your federal ones while you’re at it because it all applies the same.
– There could be something you missed. Because you know, we’re human and not perfect. You want to know that you don’t miss out on anything and end up getting audited.
– If there’s any possibility you have to pay any of this year’s special taxes (including IRA taxes, advanced earned income credit).
– Your employer could have made a mistake on how much they were taking out of your taxes in the first place.
– If you have any of the special tax cuts, breaks or rebates (buying a new home, going green, etc).
– It gives you good practice. If you can do it during a year that will be easy to calculate, it will be easier to do when it may become more complicated.
– It gets you in a good habit. Every year, you’ll be in the mindset that you have to file your taxes as soon as you get all the paperwork you need.