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Do You Need To File A Tax Return In 2014?

Tax season 2014 opens in just four days. The Internal Revenue Service will process somewhere around 140 million individual tax returns by the time tax season wraps up. Will you be filing one of those returns? And more important, do you need to?
Not every person who received income in 2013 has to file a federal income tax return. There are a number of factors that affect whether you have to file including how much you earned – and the source of that income – as well as your filing status and your age. For most folks, this is pretty straightforward.If you can be claimed as a dependent on someone else’s return, the rules are a little bit different. Here are some basic guidelines:

For single dependents who are under the age of 65 and not blind, you generally must file a federal income tax return if your unearned income (such as from dividends or interest) was more than $1,000; if your earned income (such as from wages or salary) was more than $6,100.
For single dependents who are over 65 or blind, you generally must file a federal income tax return if your unearned income was more than $2,500 or if your earned income was over $7,600.
For single dependents who are over 65 and blind, you generally must file a federal income tax return if your unearned income was more than $4,000 or if your earned income was over $9,100.
For married dependents when either of you are under the age of 65 and not blind, you generally must file a federal income tax return if your unearned income was more than $1,000; if your earned income was over $6,100; or if your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
For married dependents when either of you are over 65 or blind, you generally must file a federal income tax return if your unearned income was more than $2,200; your earned income was over $7,300; and your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
For married dependents when either of you are over 65 and blind, you generally must file a federal income tax return if your unearned income was more than $3,400; your earned income was over $8,500; and your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
Keep in mind that these rules apply to dependents who are also married, not just simply married taxpayers. For tax purposes, your spouse is never considered your dependent.
You may also have to file for other reasons. The most frequent reason for filing a federal income tax return even when you don’t meet the basic income criteria is for self-employed persons: those who are self-employed must file a federal income tax return if net earnings are at least $400. Other reasons to file include owing special taxes like a recapture tax (such as the homebuyer’s credit), alternative minimum tax (AMT), household employment taxes, taxes on tips you did not report to your employer or on wages from an employer who did not withhold those taxes. You also need to file if you had wages of $108.28 or more from a church or qualified church-controlled organization exempt from payroll taxes.
Don’t forget tax-favored accounts. You need to file if you received HSA, Archer MSA, or Medicare Advantage MSA distributions during 2013. If you took an early distribution from a qualified plan or one in excess of $160,000 from a qualified retirement plan, or if you made excess contributions to your IRA or MSA, you’ll need to file. If you didn’t take your minimum required distribution – and you were supposed to – you’ll also need to file.
Even if you don’t need to file a federal income tax return this year, you may still want to take advantage of tax breaks and credits which might be available: popular credits include the additional child credit and the American Opportunity credit. You might also be entitled to a refund for excess withholdings or a refundable credit such as the earned income tax credit (EITC). And don’t forget the newest credit: the health coverage tax credit (HCTC) – it’s also refundable.
It’s also important to consider that these are the federal rules. The rules for your state might be very different. In my own state of Pennsylvania, for example, we have no personal exemption and thus, taxpayers are subject to tax at the first dollar. It is possible that you might have to file a state (or local) income tax return even if you are exempt from federal income tax so don’t assume otherwise.
If, after all of this, you’re still confused, ask your tax professional David M.Green Bookkeeping and Tax Service or give the IRS a call (1.800.829.1040).


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