All Things Taxes

Posted By JK Harris on February 26, 2009

1. Should I file a Tax Return? You must file a tax return if your income is above a certain amount, which varies depending on your filing status, age and type of income you receive. If your income isn’t at the level where you are required to file a return but you qualify for a refundable credit, such as Earned Income Tax Credit or Health Coverage Tax Credit, then you should file a return to receive a refund from the IRS. For additional information, you can refer to www.irs.gov.
2. Choose your correct Filing Status. Your Federal tax filing status is based on your marital and family situation. Your marital status on the last day of the year determines your status for the entire year. If more than one filing status applies, you can choose the one that will give you the lowest tax obligation. The five filing status options are: Single, Married Filing Jointly, Married Filing Separately, Head of Household, and Qualifying Widow(er) with Dependent Child. For additional information, you can refer to www.irs.gov.
3. Choose the simplest Federal tax form for your needs. There are three forms for filing individual Federal income tax returns. The 1040EZ is us if: your taxable income is below $100,000; your filing status is Single or Married Filing Jointly; you (and your spouse) are under age 65 and not blind; you are not claiming any dependents; and/or your interest income is $1,500 or less. The 1040A is used if: your taxable income is below $100,000; your have capital gain distributions; you claim certain tax credits; or you claim deductions for IRA contributions, student loan interest, educator expenses or higher education tuition and fees. The 1040 is used if: your taxable income is $100,000 or more; you claim itemized deductions; you are reporting self-employment income; or you are reporting income from the sale of property. For additional information, you can refer to www.irs.gov.
4. Should I itemize? Whether or not you should itemize deductions on your Federal tax return depends on how much you spent on certain expenses last year. These expenses can include but are not limited to the following: medical care, mortgage interest, taxes, charitable contributions, casualty losses, and miscellaneous deductions. These expenses can reduce your taxes if the total amount is more than the standard deduction. The standard deduction amounts are as follows: Single, $5,350; Married Filing Jointly, $10,700; Head of Household, $7,850; and Married Filing Separately, $5,350. For additional information, you can refer to www.irs.gov.

Category: Tax Preparation
Tags: correct filing status, Federal tax form, file tax return, itemize taxes