When must I file a tax return by?
Do I have to file a tax return? This is a question many taxpayers ask during this time of year – tax time. The question is far more obsure than people believe. To fully understand, we need to consider that there are times when individuals are REQUIRED to file a tax return, and then there are times when it is to individuals’ BENEFIT to file a return (even if they are not “required” to file).
When is an individual “required” to file a tax return?
Generally, individuals must file a return if their income exceeds their filing threshold, as shown in the table below. The filing thresholds are the sum of the standard deduction for individual(s) and the personal exemption for the taxpayer and spouse (if any).
When am I required to file my tax return?
Taxpayers are must file when they have net self-employment income that exceeds $400. This includes the fact that they must file self-employment taxes when their net self-employment income exceeds $400. The self-employment requirement is when a 1099 contractor pays both the employee’s portion and the employers portion of the payroll tax.
Taxpayers are also required to file when they are required to repay a credit or benefit. For example, if a taxpayer got insurance through a government marketplace and received Advanced Premium Tax Credit (APTC) they are required to file a return whether or not they are otherwise required to file. A return is necessary in order to reconcile the APTC with the premium tax credit they got. The basis for APTC is their household income for the year. So generally if you receive a 1095-A then you must file.
A taxpayer who owes a penalty must file also, even though the taxpayer’s income is below the filing threshold. This can occur, for example, when a taxpayer has an IRA 6% early withdrawal penalty or the 50% penalty for not taking a required IRA distribution.
2016 Filing Thresholds
|Single||Under Age 65
Age 65 or Older
|Married Filing Jointly||Both Spouses Under 65
One Spouse 65 or Older
Both Spouses 65 or Older
|Married Filing Separately||Any Age||$4,505|
|Head of Household||Under 65
65 or Older
with Dependent Child
65 or Older
What does it benefit me to file, if I don’t have to?
There are a number of benefits available when filing a tax return. These benefits can produce refunds even for a taxpayer who is not required to file:
A substantial number of taxpayers fail to file their return even when the tax they owe is less than their prepayments, such as payroll withholding, estimates, or a prior overpayment. The only way to recover the excess is to file a return.
What are the refundable tax credits available to a taxpayer?
So you want to earn tax credits, and you are still wondering, “Do I have to file a tax return?” Read about these credits you could be eligible for should you file a tax return.
Earned Income Tax Credit (EITC)
If you worked and did not make a lot of money, you may qualify for the EITC. The EITC is a refundable tax credit, which means you could qualify for a tax refund. The refund could be as high as several thousand dollars even when you do not have to file.
Additional Child Tax Credit
This refundable credit, known as the Additional Child Tax Credit, may be available to you if you have at least one qualifying child.
American Opportunity Credit
The maximum for the American Opportunity Credit for college tuition paid per student is $2,500, and the first four years of postsecondary education qualify. Up to 40% of the credit is refundable when you have no tax liability, even if you do not have to file.
Premium Tax Credit
Lower-income families are entitled to a refundable tax credit to supplement the cost of health insurance purchased through a government Marketplace. To the extent the credit is greater than the supplement provided by the Marketplace, it is refundable even if there is no other reason to file.
There is a three-year statute of limitations on refunds, and after it runs out, you forfeit any refund due to you. The statute is three years from the due date of the tax return. So the refund period expires for 2016 returns, which were due in April of 2017, on April 15, 2020.
Answer, “Do I have to file a tax return?”
So to answer your question, “Do I have to file a tax return?” Call us at Worthtax. We can help you sort it all out. For more information about filing requirements and your eligibility to receive tax credits, please contact Alex Franch, BS EA at 781.849.7200. Alex is an enrolled agent with the IRS. While you are on the call, make an appointment to have your taxes prepared and filed. Worthtax has locations in Quincy, Weymouth and Dedham or book your appointment online.
Tax Return Sources and Resources