Without a doubt you’ll be hearing more and more about the tax due date and media will intensify their reporting of various tax related facts and statistics. People typically ask themselves questions such as: where should I file taxes? Or what’s the best way to file tax returns? But perhaps you should be asking yourself the following question: should I file taxes for 2012 in the first place?
The answer is not straightforward because it depends on a few factors. Those factors are filing status, age, and income level. Below table breaks down earnings thresholds and combines those 3 parameters:
Once you reach those limits you have to file a tax return but there are other scenarios, which could prompt you to do it. Even if you didn’t reach your particular threshold but had some income, you should still consider filing taxes for the following reasons:
- Your employer withheld federal income tax or you paid estimated taxes – file a return to determine if you qualify for a refund based on the contributions made. You could also receive a refund if you overpaid your taxes in the previous year and that overpayment was applied to this year.
- You could be eligible for Earned Income Tax Credit – families with qualifying children whose income is relatively low (set at $50,270 for 2012) could receive up to $5,891 in tax credit. Try EITC Assistant to determine if you should claim it.
- You could receive additional credit if you have at least one qualifying child and don’t receive the full amount of Child Tax Credit. File Form 8812 to determine if you qualify for additional credit.
- You may qualify for a 2012 Health Coverage Tax Credit valued up to 72.5% tax credit of the payments you made for qualified health insurance premiums.
- You could be eligible for educational credits. File Form 8863 (Education Credits) to determine whether or not you can take advantage of American Opportunity Credit.
Now, if you did not make any money in a given year and had no other taxable forms of income, you do not have to report anything. The IRS already has information about your zero income and there is no refund or liability that you would receive or be responsible for.