When taxes are taken directly from your paycheck, it’s a good bet that you need to file a tax return. The same goes if you received a Form 1099 reporting taxable employee earnings. The same also applies if you were eligible for an Earned Income Tax Credit or other refundable credits but didn’t file last year. If the circumstances outlined above apply to you, the first step is determining whether you must file or if you have another exemption such as being married and filing jointly, qualifying for single exemption, having your own child as dependent under age 19 and other factors that may result in not needing to file. If the answers to all of the above are yes and no, then you will need to file a return but may qualify for other exemptions which we will explain further in this article.
When to File TDS
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The simplest way to determine whether you need to file a TDS return is to check if you had any taxable income. Taxable income is the amount left over after deductions and credits are applied. This is the amount that is subject to taxes so if you made $50,000 last year and you have no other source of taxable income, you are not required to file a federal tax return this year. The only way to know for sure if you have a tax liability is to look at your tax return. If you didn’t file a tax return last year, you may still be subject to penalties. If you did file a return last year, you likely received a W-2 form from each of your employers, a 1099 for any taxable income you received, and a copy of a 1040 you filed. If you received all three, you don’t need to file again. If you didn’t receive a W-2, you should file a tax return to correct this mistake.
Exemptions for Not Filing a Tax Return
If you are not required to file a return but would benefit from claiming certain deductions, you may still want to file a return to claim these exemptions. If you’re not required to file a federal tax return, you are not required to report any income. The most common exemptions for not filing a tax return are: – You were under the age of 65 at the end of the year and retired. – You were disabled and unable to work during the year. – You were a student under the age of 24. – You were in the military. – You were an incarcerated felon.
What to Do If You Don’t Need to File
If you are not required to file a tax return, there is nothing more to do. – If you did not file a return last year, your wages may have been garnished, and you may have been given a 1099 notice and a bill to pay taxes. In this case, you should file a return to correct this mistake. – If you missed out on a refundable credit due to the lack of filing a return, you can file up to three years after the due date of the return to receive a refund. – If you earned income from a side hustle such as driving for Lyft or Uber, you should file a return to report this.
When You Must File Your Taxes
If you didn’t have to file a return last year, you may still be required to file this year. Here is a list of circumstances in which you must file a federal tax return: – You are under the age of 65 at the end of the year: If you’re retired and over the age of 65, you are not required to file a return. However, you may be required to file a return if you are under the age of 65 at the end of the year. – You received taxable income or benefits: If you received taxable income, such as a regular side hustle or a bonus from your employer, you are required by law to report this and pay taxes on it. – You are married and filing jointly: If you are married and file a joint tax return with your spouse, you must file a federal tax return.
Consequences of Filing a Tax Return
There are some serious consequences for not filing a federal tax return even if you are not required to file. The main consequence is owing taxes. Even if you don’t have any taxable income, you must file a federal tax return to ensure you receive the benefits discussed below. With these benefits, you may still be able to put a little money back in your pocket even if you don’t have taxes due. – If you fail to file a return but are otherwise eligible for an exemption, you could face a failure to file penalty. This penalty is calculated by the IRS and can be sizable. – If you are filing a return but don’t have any taxable income, you may be required to pay an “Excess advance premium tax credit repayment.” This is a penalty you’ll have to pay on health insurance. – If you are eligible to claim the EITC or any other refundable credits, you may lose access to these benefits if you fail to file a return. – If you are claiming a dependent on your tax return, you must file a return for that person even if their income is below the filing threshold.
Final Words
If you are not required to file a tax return, you can stay out of trouble with the IRS and keep your personal information out of their hands. If you are required to file a return, it is important that you do so. If you are required to file a return but do not, the IRS can assess interest and penalties on the amount you owe. – If you are required to file a tax return but fail to do so, you may be subject to a fine and could have your wages garnished. Even if you are not required to file a return, it may be in your best interest to file anyway to claim any refundable credits and put a little money back in your pocket.
