Do I Have To File Taxes?

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If I don’t owe do I have to file taxes?

DFA reader Dorothy A. asked:

If I don’t owe any tax money, do I still have to file a tax return.

Great question Dorthy, let’s take a look at what the IRS says.

Who needs to file taxes?

From the IRS website:

You must file a federal income tax return if your income is above a certain level; which varies depending on your filing status, age and the type of income you receive.  Check the Individuals section of the IRS website at http://www.irs.gov or consult the instructions for Form 1040, 1040A, or 1040EZ for specific details that may help you determine if you need to file a tax return with the IRS this year. You can also use the Interactive Tax Assistant available on the IRS website to determine if you need to file a tax return. The ITA tool is a tax law resource that takes you through a series of questions and provides you with responses to tax law questions.

From the 1040 instructions:

Use Chart A, B, or C to see if you must file a return. U.S. citizens who lived in or had income from a U.S. possession should see Pub. 570. Residents of Puerto Rico can use TeleTax topic 901 (see page 91) to see if they must file.

Even if you do not otherwise have to file a return, you should file one to get a refund of any federal income tax withheld. You should also file if you are eligible for any of the following credits.

  • Making work pay credit.
  • Earned income credit.
  • Additional child tax credit.
  • American opportunity credit.
  • First-time homebuyer credit.
  • Credit for federal tax on fuels.
  • Adoption credit.
  • Refundable credit for prior year minimum tax.
  • Health coverage tax credit.

Exception for certain children under age 19 or full-time students. If certain conditions apply, you can elect to include on your return the income of a child who was under age 19 at the end of 2010 or was a full-time student under age 24 at the end of 2010. To do so, use Form 8814. If you make this election, your child does not have to file a return. For details, use TeleTax topic 553 (see page 91) or see Form 8814.

A child born on January 1, 1987, is considered to be age 24 at the end of 2010. Do not use Form 8814 for such a child.

Resident aliens. These rules also apply if you were a resident alien. Also, you may qualify for certain tax treaty benefits. See Pub. 519 for details.

Nonresident aliens and dual-status aliens. These rules also apply if you were a nonresident alien or a dual-status alien and both of the following apply.
• You were married to a U.S. citizen or resident alien at the end of 2010.
• You elected to be taxed as a resident alien.

Chart A, which applies to most people

IF your filing status is...AND at the end of 2010 you were*...THEN file a return if your gross income** was at least...
*If you were born on January 1, 1946, you are considered to be age 65 at the end of 2010.
**Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Do not include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time in 2010 or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the instructions for lines 20a and 20b to figure the taxable part of social security benefits you must include in gross income.
***If you did not live with your spouse at the end of 2010 (or on the date your spouse died) and your gross income was at least $3,650, you must file a return regardless of your age.
Singleunder 65
65 or older
$9,350
10,750
Married filling jointly***under 65 (both spouses)
65 or older (one spouse)
65 or older (both spouses)
$18,700
19,800
20,900
Married filing separatelyany age$3,650
Head of householdunder 65
65 or older
$12,050
13,450
Qualifying widow(er) with dependent childunder 65
65 or older
$15,050
16,150

If chart B, C, or other detailed info is needed, please consult the IRS 1040 instructions.  You can also read the article from the IRS detailing who should file.

If you do need to file and haven’t yet, I recommend TurboTax – read my full TurboTax Online review.  Don’t forget that you can also file a tax extension.



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