The majority of people we know, myself included, file a tax return routinely every year because we have to do it and know we have to do it, but even if you do NOT file a tax return personally, YOU are missing out on great money opportunities for yourself..... because you might be eligible for a tax refund and not know it! So let's find out what I am talking about and let the tax tips below help you determine whether you're one of the people I am going to help save money with this short, easy read!
Standard Rules of Filing
You needing to file a tax return this year or not in terms of requirement depends on multiple factors at your starting point. The majority of the time those requirements being your level of income, your filing status, and your age at the time. Let me explain in a detailed example: if you are single and 24 years old you must file a tax return if your income was any higher than $12,200 for the year total. If you are 65+ years old, income thresholds are higher at around $13,850 (statistic pulled from the 2019 threshold for perspective). If you're self-employed or if you're listed as a dependent of another person, other tax rules may apply to you than previously listed.
Tax Withheld or Paid
Did your employer withhold federal income tax from your checks you received from them throughout the year? Did you make estimated tax payments as planned? Did you overpay last year, and have it applied to this year's tax? If you answered "yes" to any of these questions, you could be due a refund if you will take the time to file a tax return! We can handle simple ones like these in a matter of minutes.
Eligibility for Certain Tax Credits
1. Premium Tax Credit
If any of your immediate family (spouse and dependents) was enrolled in healthcare coverage in 2019 purchased from the Marketplace, you might be eligible for the Premium Tax Credit. This would be the case if you chose to have advance payments of the premium tax credit sent directly to your insurer during the year. You must reconcile any advance payments with the allowable premium tax credit.
2. Earned Income Tax Credit
Did you earn less than $55,952 last year? If so you could receive EITC as a tax refund if you qualify regardless of dependent status. You may be eligible for up to $6,557 and not even know it, let's find these breaks for you!
3. Additional Child Tax Credit
Do you have at least 1 child that qualifies for the Child Tax Credit? If you don't get the full credit amount, you may qualify for the Additional Child Tax Credit and receive a refund even if you do not owe any tax.
4. American Opportunity Credit
The AOTC (up to $2,500 per student) is available for 4 years of post-secondary education. You or your dependent must have been a student enrolled at least half-time for at least one academic period. Even if you don't owe any taxes, you still may qualify; however, you must complete Form 8863, Education Credits, and file a return to claim the credit.
5. Health Coverage Tax Credit
If you, your spouse, or a dependent received advance payments of the health coverage tax credit, you will need to file a 2019 tax return. Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments, shows the amount of the advance payments.
Other Situations That Can Also Apply to You:
You must file a return in other situations as well, including, but not limited to the following situations:
You owe special taxes such as the alternative minimum tax (AMT), additional tax on qualified plans such as an individual retirement arrangement (IRA), or another tax-favored account, or household employment taxes. However, if you are filing a return only because you owe these taxes, you can file Schedule H, Household Employment Taxes, by itself. You (or your spouse if filing jointly) received Archer MSA, Medicare Advantage MSA, or health savings account distributions.You had net earnings from self-employment of at least $400.You had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes.
Now you know to file a tax return and consult with a tax professional in order to get any possible refunds or tax breaks. If this article did not answer all of your questions that is understandable. Save some money and confusion and go ahead and ask me at any of our contact info listed on site.