Do You Have to File Taxes Every Year?

Do You Have to File Taxes Every Year?

July 27, 2020

For the majority of working Americans, filing our annual taxes is a rite of passage that pretty much no one looks forward to. If you’ve ever wished that you didn’t have to file taxes, you’re not alone. However, even if you aren’t legally required, there might be something in it for you.

Not everyone has to file taxes, depending on their income level—but there might be some reasons that you choose to do so regardless.

Should you file taxes this year in Union City, NJ? Here’s how to decide.

Income requirements

If you’re single and making under $13,850 if over 65 or under $12,200 if under 65, you’ll need to file an income tax return. Married couples filing jointly must make over $24,400 if under 65, or over $25,700 if one spouse is over 65. If both are over 65, they need to make $27,000 before they file.

Heads of household need to either make over $18,350 (under 65) or $20,000 (over 65), and the married, filing separately contingent only needs to make $5 before they must file a return.

Finally, qualifying widows have to make more than $24,400 if they are under 65, or $25,700 if they’re over 65 to file a tax return.

Of course, dependents change the game. If you are or have a dependent, you need to refer to the tax laws in order to determine whether you need to file a tax return this year in Union City, NJ, as that can affect your taxable income significantly.

Other reasons you might be required to file a return

Even if you fall below the income threshold for your specific categories, you might have to file a return anyway. For example, perhaps you had self-employment net earnings of at least $400, or owe taxes on an IRA, tax-favored account or other health savings account. You might owe an alternative minimum tax, or make more than $108.28 from a church or church organization. You may also owe recapture taxes, Social Security and Medicare taxes on tips you didn’t report or other uncollected Social Security, Medicare or railroad retirement taxes. If any of these circumstances apply to you, you should meet with a qualified tax professional as soon as possible.

Why you might choose to file a return

What if you don’t fall under these requirements? You still might want to file a return anyway. For example, if income tax was withheld from your pay or you made estimated tax payments, you qualify for the earned income tax, additional child, American opportunity or health coverage tax credits, or you qualify for a federal tax credit on fuels.

You might also qualify for another tax credit, if you received a Form 1099-B (“Proceeds From Broker and Barter Exchange Transactions”). In this case, if you add the number in box 1D to your other gross income and that puts you over the income threshold, and if box 1E is blank, you should probably file taxes.

Need help with your taxes, or wondering whether you really need to file taxes every year in Union City, NJ? Kedean’s Generation can help—call us today for more information.

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