IRS Tax Tip 2011-02 - Do I have to File a Tax Return?

Source: http://www.irs.gov/newsroom/article/0,,id=105097,00.html

Issue Number:    IRS Tax Tip 2011-02

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Do I have to File a Tax Return?


Depending on your filing status, age and the type of received income, you will have to file a federal income tax return if your income is higher that a certain level.

IRS website at http://www.irs.gov provides the details of the instructions for Form 1040, 1040A, or 1040EZ.  Also, the Interactive Tax Assistant (ITA) is available on the IRS website to determine if you need to file a tax return.  There are seven reasons why you may want to file a tax return even if you don't have to:

1. Federal Income Tax Withheld You should file to get money back if Federal Income Tax was withheld from your pay, you made estimated tax payments, or had a prior year overpayment applied to this year’s tax.

2. Making Work Pay Credit It is an earned income from work. The maximum credit for a married couple filing a joint return is $800 and $400 for other taxpayers.


3. Earned Income Tax Credit  You may qualify for EITC if you worked, but did not earn a lot of money.EITC is a refundable tax credit.

4. Additional Child Tax Credit This refundable credit may be available to you if you have at least one qualifying child and you did not get the full amount of the Child Tax Credit.

5. American Opportunity Credit The maximum credit per student is $2,500 and the first four years of postsecondary education qualify.

6. First-Time Homebuyer Credit
 (1) For First-Time Homebuyer
        (a) The credit is a maximum of $8,000 or $4,000 for married filing separately.
        (b) To qualify for the credit, taxpayers must have bought – or entered into a binding contract to buy – a principal residence located in the United States on or before April 30, 2010.  If you entered into a binding contract by April 30, 2010, you must have closed on the home on or before September 30, 2010.
 (2) For long-time residents: 
      If you bought a home as your principle residence in 2010, you may be able to qualify and claim the credit even if you already owned a home. In this case, the maximum credit for long-time residents is $6,500, or $3,250 if your filing status is married filing separately.

7. Health Coverage Tax Credit Certain individuals, who are receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a Health Coverage Tax Credit worth 80 percent of monthly health insurance premiums when you file your 2010 tax return.