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TAX TIP No. 4
Who has to file taxes?
Believe it or not, some people
make it through tax-filing season without any hassle. That's because
the Internal Revenue Service doesn't require a return from them.
Unfortunately, most of us
aren't that lucky. So just who has to file a tax return?
File a return
Three
things must be considered
when determining whether you
have to file a return: your
age, your filing status and
your income. Generally, once
you reach a certain income
level, the law requires you
to file. The amounts are adjusted
annually for inflation.
For 2007 tax returns, individuals younger than age
65 must file if they make at least:
- $8,750
as single filers.
- $11,250
as head of household filers.
- $17,500
as married couples filing
jointly and both husband
and wife are younger than
65.
The earnings threshold amounts
go up a bit for older (65-plus) individuals:
- $10,050
for single filers.
- $12,550
for head of household filers.
- $18,550
for married couples filing
jointly where one spouse
is age 65 or older.
- $19,600
for married couples filing
jointly where both partners
are 65 or older.
The earnings target is the same -- $3,400 -- for married
couples filing separately, regardless of age.
Special
circumstances
Speaking of age, the IRS has
a filing gift for you if your
65th birthday was Jan. 1.
In most situations,
your age for tax purposes
depends on how old you were
on the last day of the year.
But when it comes to determining
whether you have to file a
return, the IRS says if you
turned 65 on New Year's Day
2008, you are considered to
be 65 at the end of 2007.
That one-day grace period
allows you to use the higher
income thresholds to determine
whether you must file a return
this year. And that means
you can have earned hundreds
more last year and still not
have to send in a return this
April.
There also are separate income
thresholds for taxpayers who have special filing considerations.
In some cases, widows or widowers younger than 65 who care for a dependent child can make up to $14,100 and not have to file a return. Individuals age 65 and older in this situation can earn up to $15,150. In the year a husband or wife dies, the surviving spouse still files a joint return (married filing jointly status). Then, if caring for a dependent child, he or she can use this status (rather than head of household with its lower earning limits) for two subsequent years as long as he or she does not remarry.
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