#and I don't make enough to qualify for the tax credit on the marketplace so 🙃

[katamarei]

health insurance makes me want to kill myself for real

[messengerhermes]

Thinking about the last post I reblogged about healthcare in the United States, and I wanted to share some info about the Affordable Care Act, Medicaid, and why they are not enough in our current system. See, I live in Texas, a state whose legislatures refused to expand Medicaid, which is government healthcare coverage. This means that unless you're a single parent, a pregnant person, or disabled and qualify for disability benefits, you will not get Medicaid in this state. Well, if you don't qualify for Medicaid, then you can get insurance through the Affordable Care Act Marketplace, right? Sure, except the cheapest plan I can get in Texas is $260 a month, only covers select counties, and would leave me out of luck if I travel out of state and need healthcare. The next plan up that covers all the hospitals in my city and includes national coverage if I need healthcare out of state is $350 per month. $350 per month is the cost of having coverage just in case I need medical treatment. I would still have a copay for any specialist I see (this plan does include yearly checkups if you stay in Network), I still have to pay for prescriptions (I spoke with a broker, and only one of my two prescriptions is covered), and if I have any procedures or tests done, I have to hit a $7,000 deductible before the insurance kicks in and pays for shit. Also, this plan doesn't include dental or vision. Because I guess teeth and eyes are not part of the human body. Now Hermes, you might say, doesn't the ACA marketplace offer tax credits to people to help reduce the monthly cost of coverage? Yes, the ACA marketplace offers a tax credit to people who make more than $12,500 per year. As someone who's been unemployed this entire year, I don't qualify. So I can pay full price for a healthcare plan, or go uninsured. The ACA Marketplace doesn't offer tax credits to those making less than $12,500 per year because the law assumes you will qualify for Medicaid in your state. But in Texas and the 11 other states that rejected Medicaid expansion, thousands of people *don't* qualify for Medicaid and are left without healthcare coverage. This is a gap created by the Federal Government doing a halfway job on expanding healthcare access and then going "states' rights" at the last leg of the relay race. People die in this gap every day. Even the ACA tax credits aren't actually a reduction in the cost of coverage. The tax credit allows people to borrow from themselves, using the money they would have gotten in their Tax return throughout the year to help pay for coverage rather than getting that tax return check all at once. This post is long as hell, and I could go on for inches more telling you stories of loved ones both insured and uninsured who have their own nightmares with the healthcare system. I could list every time a test has cost me hundreds of dollars even when it was covered. But honestly, so could every American on this website, probably. This is the state of US healthcare. Insurance providers have the power to deny coverage in the most arbitrary of ways, hospital systems can set their prices without restrictions, and pharmaceutical companies can inflate the prices of life-saving medications for their own profit. Healthcare regulation is necessary. Universal healthcare is necessary.

[elizabethcariasa]

10 reasons to file a tax return even if you don't have to

You just read my post on tax filing requirements (thanks!) and discovered you don't have to file a Form 1040 this year.

So, as fictional television attorney (though not a tax specialist) Jimmy McGill might say, "'S'all good, man."

Right? Not necessarily.

Sometimes even if you don't have to file a federal tax return, it's to your benefit to do so. Here are 10 situations when you should send the Internal Revenue Service a return:

You're due a refund. This often is the case if you had federal income tax withheld. The only way to get any of that prepaid tax money back as a refund is to file a 1040. This also is the case for folks who are required to file, but don't mess with the process because they don't owe tax. I've personally known folks who just didn't bother to file. From a financial perspective, it was an unwise move since they were due a small refund. I firmly believe that you should never give Uncle Sam money he's not due, even if it isn't much.

via Giphy And yes, not filing technically is breaking the tax law. But since the penalty for not filing is based on the amount a taxpayer owes, there's no consequence, other than not getting your refund.

You qualify for the Earned Income Tax Credit (EITC). This tax break for lower- and middle-income workers is, as the name says, a credit, which means it reduces any tax you owe dollar-for-dollar. It's also a refundable credit, meaning you can get a tax refund even if you don't owe any tax. The amount of the credit and its income thresholds are adjusted annually for inflation, with as much as $6,557 available filers with families and $529 for eligible single taxpayers on their 2019 returns.

You qualify for the refundable portion of the Tax Cuts and Jobs Act's (TCJA) new child tax credit. Like the EITC, this additional child tax credit means you could get money back — as much as $1,400 — even if you don't owe any tax.

You qualify for the American Opportunity tax credit. This educational tax break could give you a credit of up to $2,500 and portion of it — up to $1,000 — is refundable to some qualifying filers.

You qualify for the Affordable Care Act's (ACA) premium tax credit. Yes, the tax penalty for not buying medical coverage is gone. But Obamacare, which how many folks still refer to the medical coverage they get through a marketplace, is still around. So is this tax break for folk who buy their health insurance coverage through a marketplace. If you didn't get this credit in advance to help pay your policy premiums, you can get reimbursed for your premium payments by claiming this credit when, you got it, you file your return.

To establish a placeholder for tax deductions and/or credits you need to carry forward. TurboTax points out, for example, that you can't claim a home office deduction so large that it would produce a loss. Instead, you claim zero business income for the year and carry any leftover deduction into the next year when you expect to make more self-employment money. But in order to claim that extra write-off in future, better-paying years, you need to file for that initial claim.

You got a Form 1099-B. Even if this tax document (or substitute statement) that details, per its title, Proceeds From Broker and Barter Exchange Transactions, doesn't report enough investment income to require you to file, you might want to do so anyway. IRS Publication 501 details on page 5 the reasons why, the most convincing of which is that "filing a return may keep you from getting a notice from the IRS."

You made estimated tax payments. You want to make sure the IRS knows that you sent in these extra amounts for income that's not subject to withholding.

You must file a state return. Most states collect some sort of income tax. And most of those 43 jurisdictions use their residents' federal tax filings as the basis for the state returns. But your state may have some differences with Uncle Sam's tax laws when it comes to filing requirements. So if you have to file a state tax return, submitting a federal version could help you comply with your state tax responsibilities. Or even get you a state refund.

To start the audit statute of limitations clock ticking. Yes, audit rates continue to drop. But no one wants to be in that small percentage of filers whose form get picked for an extra IRS examination, which is what the agency calls the process. The IRS generally can go back three years to look at your old tax filings. However, that tax audit clock doesn't start ticking until you actually file a 1040. So even if you didn't make quite enough to trigger the filing requirement, you might want to make sure the IRS can't come back, say, five years from now to ask about why you didn't file in 2019.

If any of these potentially positive tax-filing circumstances apply to you, send in a federal 1040.

Yes, it will take some work. But, if your taxes are not complicated, software like that available from Free File can help.

And making sure your tax paperwork is filed and you get any refund you're due should more than make up for the effort.

You also might find these items of interest:

5 tax tips for Free File users

2019 tax return filing checklist

6 reasons to file your taxes early

Advertisements

  // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ (adsbygoogle = window.adsbygoogle || []).push({}); // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]>  

[christophergill8]

12 reasons to file a tax return even if you don't have to

Broad City image via Giphy.com

Do you have to file a return? Sorry to be the bearer of bad news, but the answer usually is yes.

But there's a difference between having to file a tax return and submitting a 1040 form because you should. And by should, I mean when it's to your advantage to do so.

Yes, that does happen in the tax world now and then.

When filing is required: First, though, let's look at when the tax code says we must send the Internal Revenue Service a Form 1040. 

If you are a U.S. citizen or resident who made money last year, whether you must tell the Internal Revenue Service about it depends on three things:

Your gross income,

Your filing status, and

Your age.

The IRS created the table (shown as Chart A in the 2018 Form 1040 instructions) below to give you an idea of whether you should start getting your filing material together.

2018 Filing Requirements for Most Taxpayers

 If your filing status is: 

 AND at the end of 2018  you were:

THEN file a return if your gross income was at least:

 Single

 64 or younger  65 or older

 $12,000  $13,600

 Married filing jointly

 64 or younger (both spouses)  65 or older (one spouse)  65 or older (both spouses)

 $24,000  $25,300  $26,600

 Married filing separately

 Any age

 $5 (Yes, five bucks)

 Head of Household 

 64 or younger  65 or older

 $18,000  $19,600

 Qualifying widow/widower

 64 or younger  65 or older

 $24,000  $25,300

  A quick filing note for some older New Year's Day babies. The IRS says that if you were born on Jan. 1, 1954, you are considered to be age 65 at the end of 2018. That one-day shift lets you make a little more before you have to mess with filing.

Also, for filing requirement purposes, the IRS says that gross income means all income you received in the form of money, goods, property, and services that isn't exempt from tax, including any income from sources outside the United States or from the sale of your main home, even if you can exclude part or all of it.

In this gig economy world, all income definitely means money from these jobs, be they your full-time work or simply side hustles to supplement your wage income. And the earnings count even if you don't get an official tax form, usually a 1099-MISC or 1099-K.

You don't, however, have to include any Social Security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time in 2017 or (b) one-half of your Social Security benefits plus your other gross income and any tax-exempt interest is more than $25,000 or $32,000 if married filing jointly.

And since the IRS has seen it all, it notes that if even if you're married, if you didn't live with your spouse at the end of 2018 (or on the date your spouse died) and your gross income was at least $5, you must file a return regardless of your age. That's the same as the five-buck income threshold for married filing separately folks.

There also are filing matters to consider if someone can claim you as a tax dependent. Basically, your filing requirement again takes into account your filing status, age and income. Chart B in the 2018 Form 1040 instructions has details.

Again, I'm just the messenger when it comes to keeping the IRS off your back when it comes to filing, so please, as the old saying goes, don't shoot me.

Other filing factors: One of the biggest complaints about taxes, aside from the actual dollars we pay, is how complicated they are. That's obvious in the rules regarding income and filing status above that determine whether you must file a 1040.

But there also are other factors that, well, factor into the decision. They include —

You have household help and pay your employees enough to trigger employment taxes. For the 2018 tax year, that's $2,100 and it means you must file a Schedule H with your 1040. Although this requirement is popularly called the nanny tax, it covers not just childcare assistance, but also maids, housekeepers, gardeners and others who work in or around your private residence as your employee. Note the designation as employees. This doesn't apply independent contractors who do household work for you. Be careful here. The IRS looks closely at worker designations. The good news, though, is that if you are filing a tax return only because you owe this tax, you can file Schedule H by itself.

You or your spouse or dependents got advance payments of the premium tax credit to help cover medical coverage purchased through the healthcare Marketplace. You need to file to reconcile those amounts.

You made, after expenses, at least $400 from self-employment. While you might not technically have made enough to require filing, you still have to file in order to pay the self-employment (SE) tax on these independent earnings. The tax due here, calculated on Schedule SE, is the self-employed person's version of the payroll taxes that go toward Social Security and Medicare, aka FICA, that are taken out of salaried workers' checks. Again, it bears repeating. It's possible you could owe SE taxes, but no income tax. However, you still must file to report those independent earnings.

You can find more about filing requirements in the IRS' general tax guide, Publication 17. You also can use the IRS' online tool to determine whether you need to file this year.

When you should file: OK, you've discovered you technically don't have to file a return. Great, right?

To borrow one of Donald J. Trump's favorite words, Wrong!

Sometimes even if you don't have to file a tax return, it's to your benefit to do so.

Here are a dozen situations when you should file a federal income tax return:

You had federal income tax withheld. The only way to get any of this excess money back as a refund is to file a 1040.

You made estimated tax payments. You want to make sure the IRS knows that you sent in these extra amounts for income that's not subject to withholding.

You qualify for the Earned Income Tax Credit (EITC). This tax break for lower- and middle-income workers is, as the name says, a credit, which means it reduces any tax you owe dollar-for-dollar. It's also a refundable credit, meaning you can get a tax refund even if you don't owe any tax. The amount of the credit and the income thresholds are adjusted annually for inflation, with as much as $6,431 available to some EITC eligible filers for the 2018 tax year.

You qualify for the refundable portion of the Tax Cuts and Jobs Act's (TCJA) new child tax credit. Like the EITC, this additional child tax credit means you could get money back — as much as $1,400 — even if you don't owe any tax.

You qualify for the Affordable Care Act's (ACA) premium tax credit. Yes, Obamacare is still law. Most people who qualify for this credit get it in advance — which, as noted in the must-file discussion above, means you have to send in a Form 1040 — when they purchase their health insurance via the Marketplace. But you do have the option of paying all your premiums in full yourself during the tax year and then claiming the credit when, you got it, you file your return.

You qualify for the health coverage tax credit (HCTC). The HCTC is a refundable tax credit that pays 72.5 percent of qualified health insurance premiums for eligible individuals and their families. This is a separate, more narrow tax credit with different rules than the ACA's premium tax credit. The IRS has a special Web page with HCTC eligibility and claiming details.

You qualify for the American opportunity tax credit. This educational tax break could give you a credit of up to $2,500 and portion of it — up to $1,000 — is refundable to some qualifying filers.

You owe the Alternative Minimum Tax (AMT). This parallel tax, created in the 1960s to ensure that rich taxpayers paid at least some (aka minimum) amount of tax, used to snare a lot of middle-income filers because it wasn't indexed for inflation. That changed in 2013, with the annual exemption amounts now reducing the number of folks caught in this tax net. The TCJA went even further, increasing AMT phaseout threshold amounts to $1 million for married taxpayers filing a joint return and $500,000 for all other taxpayers. If, however, you make enough that you have to pay the AMT, then you must file.

You didn't report all your tips to your employer. You now need to do that by filing a return and also paying the SE tax on those gratuities. The same SE filing is required if you got a paycheck, but your employer didn't withhold these FICA taxes.

You qualify for the credit for federal tax on fuels. With this one, you might have to wait to file. This relatively arcane tax break for biodiesel and renewable diesel fuels, as well as the alternative fuel credit, had expired. They are part of the group of tax breaks known as extenders, which are still awaiting Congressional action. If they are renewed for the 2018 tax year and beyond, you'll be able to claim them. For now, you can get an extension if this tax break makes a big difference to your filing or you can amend your return later if the credits are restored. Form 4136 instructions have more details.

To establish a placeholder for tax deductions and/or credits you need to carry forward. TurboTax points out that, for example, you can't claim a home office deduction so large that it would produce a loss. Instead, you claim zero business income for the year and carry any leftover deduction into the next year. But in order to claim that extra write-off in future years when you do have more income, Smart Money writer Bill Bischoff says you need to file for that initial claim.

To start the audit statute of limitations clock ticking. The IRS generally can go back three years to look at your old tax filings. But that time frame doesn't start until you actually file a 1040. So even if you didn't make quite enough to trigger the filing requirement, you might want to make sure the IRS can't come back, say, 10 years from now to ask about why you didn't file in 2018.

The main reason to file, though, even if you don't have to is to get tax cash. The IRS doesn't know what tax breaks you qualify for, so it's not just going to send you the cash.

The only way to get any tax money you're owed because of over-withholding or tax credits you qualify for is to file a return and claim them.

So if any of these 12 potentially positive tax-filing circumstances apply to you, send in a 1040!

Advertisements

  // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ (adsbygoogle = window.adsbygoogle || []).push({}); // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]>  

from Tax News By Christopher https://www.dontmesswithtaxes.com/2019/04/12-reasons-to-file-a-tax-return-even-if-you-dont-have-to.html

[elizabethcariasa]

12 reasons to file a tax return even if you don't have to

Broad City image via Giphy.com

Do you have to file a return? Sorry to be the bearer of bad news, but the answer usually is yes.

But there's a difference between having to file a tax return and submitting a 1040 form because you should. And by should, I mean when it's to your advantage to do so.

Yes, that does happen in the tax world now and then.

When filing is required: First, though, let's look at when the tax code says we must send the Internal Revenue Service a Form 1040. 

If you are a U.S. citizen or resident who made money last year, whether you must tell the Internal Revenue Service about it depends on three things:

Your gross income,

Your filing status, and

Your age.

The IRS created the table (shown as Chart A in the 2018 Form 1040 instructions) below to give you an idea of whether you should start getting your filing material together.

2018 Filing Requirements for Most Taxpayers

 If your filing status is: 

 AND at the end of 2018  you were:

THEN file a return if your gross income was at least:

 Single

 64 or younger  65 or older

 $12,000  $13,600

 Married filing jointly

 64 or younger (both spouses)  65 or older (one spouse)  65 or older (both spouses)

 $24,000  $25,300  $26,600

 Married filing separately

 Any age

 $5 (Yes, five bucks)

 Head of Household 

 64 or younger  65 or older

 $18,000  $19,600

 Qualifying widow/widower

 64 or younger  65 or older

 $24,000  $25,300

  A quick filing note for some older New Year's Day babies. The IRS says that if you were born on Jan. 1, 1954, you are considered to be age 65 at the end of 2018. That one-day shift lets you make a little more before you have to mess with filing.

Also, for filing requirement purposes, the IRS says that gross income means all income you received in the form of money, goods, property, and services that isn't exempt from tax, including any income from sources outside the United States or from the sale of your main home, even if you can exclude part or all of it.

In this gig economy world, all income definitely means money from these jobs, be they your full-time work or simply side hustles to supplement your wage income. And the earnings count even if you don't get an official tax form, usually a 1099-MISC or 1099-K.

You don't, however, have to include any Social Security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time in 2017 or (b) one-half of your Social Security benefits plus your other gross income and any tax-exempt interest is more than $25,000 or $32,000 if married filing jointly.

And since the IRS has seen it all, it notes that if even if you're married, if you didn't live with your spouse at the end of 2018 (or on the date your spouse died) and your gross income was at least $5, you must file a return regardless of your age. That's the same as the five-buck income threshold for married filing separately folks.

There also are filing matters to consider if someone can claim you as a tax dependent. Basically, your filing requirement again takes into account your filing status, age and income. Chart B in the 2018 Form 1040 instructions has details.

Again, I'm just the messenger when it comes to keeping the IRS off your back when it comes to filing, so please, as the old saying goes, don't shoot me.

Other filing factors: One of the biggest complaints about taxes, aside from the actual dollars we pay, is how complicated they are. That's obvious in the rules regarding income and filing status above that determine whether you must file a 1040.

But there also are other factors that, well, factor into the decision. They include —

You have household help and pay your employees enough to trigger employment taxes. For the 2018 tax year, that's $2,100 and it means you must file a Schedule H with your 1040. Although this requirement is popularly called the nanny tax, it covers not just childcare assistance, but also maids, housekeepers, gardeners and others who work in or around your private residence as your employee. Note the designation as employees. This doesn't apply independent contractors who do household work for you. Be careful here. The IRS looks closely at worker designations. The good news, though, is that if you are filing a tax return only because you owe this tax, you can file Schedule H by itself.

You or your spouse or dependents got advance payments of the premium tax credit to help cover medical coverage purchased through the healthcare Marketplace. You need to file to reconcile those amounts.

You made, after expenses, at least $400 from self-employment. While you might not technically have made enough to require filing, you still have to file in order to pay the self-employment (SE) tax on these independent earnings. The tax due here, calculated on Schedule SE, is the self-employed person's version of the payroll taxes that go toward Social Security and Medicare, aka FICA, that are taken out of salaried workers' checks. Again, it bears repeating. It's possible you could owe SE taxes, but no income tax. However, you still must file to report those independent earnings.

You can find more about filing requirements in the IRS' general tax guide, Publication 17. You also can use the IRS' online tool to determine whether you need to file this year.

When you should file: OK, you've discovered you technically don't have to file a return. Great, right?

To borrow one of Donald J. Trump's favorite words, Wrong!

Sometimes even if you don't have to file a tax return, it's to your benefit to do so.

Here are a dozen situations when you should file a federal income tax return:

You had federal income tax withheld. The only way to get any of this excess money back as a refund is to file a 1040.

You made estimated tax payments. You want to make sure the IRS knows that you sent in these extra amounts for income that's not subject to withholding.

You qualify for the Earned Income Tax Credit (EITC). This tax break for lower- and middle-income workers is, as the name says, a credit, which means it reduces any tax you owe dollar-for-dollar. It's also a refundable credit, meaning you can get a tax refund even if you don't owe any tax. The amount of the credit and the income thresholds are adjusted annually for inflation, with as much as $6,431 available to some EITC eligible filers for the 2018 tax year.

You qualify for the refundable portion of the Tax Cuts and Jobs Act's (TCJA) new child tax credit. Like the EITC, this additional child tax credit means you could get money back — as much as $1,400 — even if you don't owe any tax.

You qualify for the Affordable Care Act's (ACA) premium tax credit. Yes, Obamacare is still law. Most people who qualify for this credit get it in advance — which, as noted in the must-file discussion above, means you have to send in a Form 1040 — when they purchase their health insurance via the Marketplace. But you do have the option of paying all your premiums in full yourself during the tax year and then claiming the credit when, you got it, you file your return.

You qualify for the health coverage tax credit (HCTC). The HCTC is a refundable tax credit that pays 72.5 percent of qualified health insurance premiums for eligible individuals and their families. This is a separate, more narrow tax credit with different rules than the ACA's premium tax credit. The IRS has a special Web page with HCTC eligibility and claiming details.

You qualify for the American opportunity tax credit. This educational tax break could give you a credit of up to $2,500 and portion of it — up to $1,000 — is refundable to some qualifying filers.

You owe the Alternative Minimum Tax (AMT). This parallel tax, created in the 1960s to ensure that rich taxpayers paid at least some (aka minimum) amount of tax, used to snare a lot of middle-income filers because it wasn't indexed for inflation. That changed in 2013, with the annual exemption amounts now reducing the number of folks caught in this tax net. The TCJA went even further, increasing AMT phaseout threshold amounts to $1 million for married taxpayers filing a joint return and $500,000 for all other taxpayers. If, however, you make enough that you have to pay the AMT, then you must file.

You didn't report all your tips to your employer. You now need to do that by filing a return and also paying the SE tax on those gratuities. The same SE filing is required if you got a paycheck, but your employer didn't withhold these FICA taxes.

You qualify for the credit for federal tax on fuels. With this one, you might have to wait to file. This relatively arcane tax break for biodiesel and renewable diesel fuels, as well as the alternative fuel credit, had expired. They are part of the group of tax breaks known as extenders, which are still awaiting Congressional action. If they are renewed for the 2018 tax year and beyond, you'll be able to claim them. For now, you can get an extension if this tax break makes a big difference to your filing or you can amend your return later if the credits are restored. Form 4136 instructions have more details.

To establish a placeholder for tax deductions and/or credits you need to carry forward. TurboTax points out that, for example, you can't claim a home office deduction so large that it would produce a loss. Instead, you claim zero business income for the year and carry any leftover deduction into the next year. But in order to claim that extra write-off in future years when you do have more income, Smart Money writer Bill Bischoff says you need to file for that initial claim.

To start the audit statute of limitations clock ticking. The IRS generally can go back three years to look at your old tax filings. But that time frame doesn't start until you actually file a 1040. So even if you didn't make quite enough to trigger the filing requirement, you might want to make sure the IRS can't come back, say, 10 years from now to ask about why you didn't file in 2018.

The main reason to file, though, even if you don't have to is to get tax cash. The IRS doesn't know what tax breaks you qualify for, so it's not just going to send you the cash.

The only way to get any tax money you're owed because of over-withholding or tax credits you qualify for is to file a return and claim them.

So if any of these 12 potentially positive tax-filing circumstances apply to you, send in a 1040!

Advertisements

  // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ // <![CDATA[ (adsbygoogle = window.adsbygoogle || []).push({}); // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]> // ]]>  

[christophergill8]

10 reasons to file a tax return even if you don't have to

Do you have to file a return? Don't shoot the messenger, but the answer usually is yes.

If you are a U.S. citizen or resident who made money last year, whether you must tell the Internal Revenue Service about it depends on three things:

Your gross income,

Your filing status, and

Your age.

The IRS created the table below to give you an idea of whether you should start getting your filing material together.

A quick filing note for some older New Year's Day babies. The IRS says that if you were born on Jan. 1, 1952, you are considered to be age 65 at the end of 2016. That one day shift lets you make a little more before you have to mess with filing.

Other filing factors: There are other things to take into account when it comes to filing if someone can claim you as a tax dependent.

Also, if you netted at least $400 from self-employment endeavors, then you need to file in order to pay your self-employment tax. This amount, calculated on Schedule SE, is the self-employed person's version of the payroll taxes that are taken out of salaried workers' checks.

And yes, it is possible that you could owe SE taxes, but no income tax.

You can find more about filing requirements in the IRS' general tax guide, https://www.irs.gov/pub/irs-pdf/p17.pdf Publication 17. You also can use the IRS' online IRS https://www.irs.gov/uac/do-i-need-to-file-a-tax-return online tool to determine whether you need to file this year.

When you should file: OK, you've discovered you technically don't have to file a return. Great, right?

To borrow a favorite word from our new president, Wrong!

Sometimes even if you don't have to file a tax return, it's to your benefit to do so.

Here are 10 situations when you should file a federal income tax return:

You had federal income tax withheld.

You made estimated tax payments.

You qualify for the Earned Income Tax Credit (EITC). This tax break for lower- and middle-income workers is refundable, meaning you can get a tax refund even if you don't owe any tax. The amount of the credit and the income thresholds are adjusted annually for inflation.

You qualify for the additional child tax credit. Like the EITC, the additional child tax credit is refundable. 

You qualify for the Affordable Care Act's premium tax credit. Most people who qualify for this credit get it in advance when they purchase their health insurance via a marketplace. But you do have the option of paying your premiums yourself and then claiming the credit when, you got it, you file your return.

You qualify for the health coverage tax credit (HCTC). The The HCTC is a tax credit that pays a percentage of health insurance premiums for certain eligible taxpayers and their qualifying family members. The HCTC is a separate tax credit with different eligibility rules than the premium tax.

You qualify for the American opportunity tax credit. This educational tax break could give you a credit of up to $2,500 and portion of it -- up to $1,000 -- is refundable to some qualifying filers.

You qualify for the credit for federal tax on fuels. Yes, this is rather arcane, but some folks are affected by this. Get more info in Form 4136 instructions.

To establish a placeholder for tax deductions and/or credits you need to carry forward. TurboTax points out that, for example, you can't claim a home office deduction so large that it would produce a loss. Instead, you claim zero business income for the year and carry any leftover deduction into the next year. But in order to claim that extra write-off in future years when you do have more income, Smart Money writer Bill Bischoff says you need to file for that initial claim.

To start the audit statute of limitations clock ticking. The IRS generally can go back three years to look at your old tax filings. But that time frame doesn't start until you actually file a 1040. So even if you didn't make quite enough to trigger the filing requirement, you might want to make sure the IRS can't come back, say, 10 years later to ask about why you didn't file in 2017.

Remember, the only way to get any tax money you're owed because of over-withholding or credits for which you qualify is to file for them.

And if any of these 10 circumstances applies to you, then consider filing.

Mandated refund delay: Remember, though, that if you're filing because you are eligible for the EITC or additional child tax credit, the IRS has to hold your refund until Feb. 15, and more realistically until the end of next month.

The delay is the law, not just because the IRS wants to make your life more difficult. So yell at your Representative and Senators, not the tax agency.

But the delay is for a good reason. The IRS can use the extra time to double check the filing and make sure it's from you, the legitimate tax filer, and not by some identity thief looking to steal your tax cash via a fraudulent refund.

So double check whether you must file and, just as importantly, whether you should.

You also might find these items of interest:

Tax filing checklist for 2017

5 tax tips for Free File users

New on more W-2 forms this year: a verification code

from Tax News By Christopher http://feedproxy.google.com/~r/DontMessWithTaxes/~3/FIMDtcOvwbo/10-reasons-to-file-a-tax-return-even-if-you-dont-have-to.html