You probably know that you need to file a tax return for yourself, but what about your high schooler who mows yards for extra spending money? What about your grandmother who works about an hour a week for a friend’s business?
Several factors affect whether or not someone is required to file a tax return, including filing status, age, and type of income received.
The IRS offers an Interactive Tax Assistant tool, which will collect a variety of information about your situation and then tell you if you need to file a return.
But even if you aren’t required to file, it may make sense to. Here are five reasons why.
1. You may be due a refund due to overwithholding. If your pay was subject to withholding, you could be due a refund.
2. You may be eligible for the Earned Income Tax Credit. If you worked but earned less than $50,270 last year, you may qualify for EITC. Families with qualifying children may qualify to get up to $5,891 dollars, so it’s worth filing to get this partially refundable credit if you’re eligible.
3. You may be eligible for the Additional Child Tax Credit. If you have at least one qualifying child and you don’t get the full amount of the Child Tax Credit, you may qualify for this additional refundable credit. To get the credit, file and use new Schedule 8812, Child Tax Credit.
4. You may be eligible for the American Opportunity Credit. If you or someone you support is a student, you might be eligible for this credit. Even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student. You’ll need to file Form 8863, Education Credits, and submit it with your tax return to claim the credit.
5. You may be eligible for the Health Coverage Tax Credit. If you’re receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, you may be eligible for a 2012 Health Coverage Tax Credit. Spouses and dependents may also be eligible. If you’re eligible, you can receive a 72.5 percent tax credit on payments you made for qualified health insurance premiums.
