· Your filing status
· Your income level
· Your age
· Your dependency status
The easiest way to determine if you are required to file is through the Interactive Tax Assistant on the IRS website. You will be guided through a series of questions about your status and income level to determine if you need to file.
If you do not file a return when one is required, the government will most likely file one in your place. This is known as a “substitute for return.” You do not want to let this happen. When the IRS files for you, they add fees for not filing and you are not given any credits or deductions, therefore taking more of your money.
So what’s the nitty gritty to knowing when you should file to avoid a “substitute for return?” See the chart below from efile.com with minimum income levels for filing for different groups.
*Visit efile.com for information on filing with dependents
There are also advantages to filing even if it is not required. Below are a few reasons why filing may be advantageous:
· Your employer often withholds some of your paycheck for federal income taxes to send to the IRS. When you file a tax return you get the amount back the exceeded the amount of taxes you owed.
· If you work but are not paid a lot you may quality for the Earned Income Tax Credit (ETIC)
· You may qualify for the Additional Child Tax Credit
· You may qualify for Educational Tax Credits if you are currently a student
· Tax returns are useful when applying for loans