The first thing to look at when it comes to whether or not you are required to file a tax return depending on if your adjusted gross income (AGI) exceed certain thresholds. Relative to the particular tax year if the taxpayer has income over the standard deduction for that tax year then they may need to file taxes. If someone owed a tax liability because they had an AGI over the standard deduction and no withholding or credits to offset that liability owed then they would be required to file.
The people this most often affects are the self employed especially single filers. The self employed most benefit from income deductions they can claim by filling a federal tax return for their self employment income.
Marketplace Health Insurance (i.e. Obamacare) has made the question “Do I need to file a tax return?” much more difficult. Basically, if you received health insurance subsidies (i.e. reduced cost) through the Health Insurance Marketplace during the year, you must file a tax return. It does not matter how much you earned, you must file a tax return.
If you do not file a tax return, you will not be eligible to receive health insurance subsidies going forward. If you have Obamacare, file a tax return.
In the past, most tax clients who asked “Do I Need to File a Tax Return?” were receiving Social Security. They asked this question because their other income had decreased and been replaced by Social Security and along the way someone told them that Social Security was not taxable. Let us clarify that for you, Social Security is considered sometimes partly taxable.
Yes, Social Security income can be considered taxable income (up to 85%) depending upon the amount of total income you have that is not Social Security. Again, at M&M Tax we prefer to review your tax documents or at least talk to you before we answer the question, if you have other types of income in addition to your Social Security. However, if your only source of income is Social Security and you do not receive health insurance subsidies, then you are not required to file.
The biggest reason to file when you are not required to file is to get a tax refund. Yes, you may not be required to file, but you are going to want to file if you qualify for a tax refund. Tax refunds can be created from federal tax withheld on your income or from tax credits you may qualify for even when your not required to file.
The most common credits people file for but are not limited to the earned Income credit, and child tax credit. Also households that never received stimulus payments can still claim them through their 2021 and 2020 tax returns.
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*Tax preparation starts at $99 after using $50 off coupon. Tax preparation charges are based on the complexity of your tax return and the risk associated with preparing your tax return. Electronic filing, a single state tax return and Obamacare tax forms are included for free with paid federal tax preparation.
¹ To be eligible for the $6,000 loan amount, your expected Federal refund less authorized fees must be at least $7,000. An Easy Advance (EA) is a loan secured by and paid back with your tax refund and is offered by Republic Bank & Trust Company, Member FDIC, to eligible taxpayers. Loan amount options are based on your expected Federal refund less authorized fees. If approved for an EA, a Finance Charge will apply. Loan is subject to underwriting and approval. EA proceeds are typically available within 24 hours of IRS acceptance of tax return or within 24 hours for those filing before the IRS start date; however, if direct deposit is selected, it may take additional time for your financial institution to post the funds to your account. Visit your tax preparer to learn about the cost and timing of all filing and product options. Available with preparation of 2022 federal tax return through Feb. 28, 2023.
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