Does everyone have to file a tax return?

This is one of the most common questions I get asked. Since we're getting down to the wire here, this seems as good a time as any to address it. (Don't forget, Tax Day is April 17 this year!) What are the circumstances under which one can get away with not filing a tax return? First, there are two important points to consider:

• Even if your circumstances are such that you don't HAVE to file a refund, you may still be entitled to a refund if taxes were withheld from your wages or other sources of income. Depending on your income, you may be eligible for the Earned Income Tax Credit, which can provide a federal refund of up to $5,751. Therefore, it can be wise to file even if not required to.
• If you are considered a dependent (for example, your parents list you as a dependent on their taxes), you may be required to file your own separate return if you make a certain amount of money. Those requirements are different than for non-dependents, so read on!

In determining whether or not you need to file, there are four main factors:

• Whether or not you are a dependent
• Your filing status (What is my filing status?)
• Your age
• Your gross income (all income you received EXCEPT social security benefits UNLESS you are married filing separately and you lived with your spouse during the year)

For people who are not dependents:

Filing Status	Age at the end of 2011	Minimum Income
Single	Under 65	$9,500
	65 or older	$10,950
Head of Household	Under 65	$12,200
	65 or older	$13,650
Married Filed Jointly	Under 65 (both spouses)	$19,000
	65 or older (one spouse)	$20,150
	65 or older (both spouses)	$21,300
Married Filing Separately	Any age	$3,700
Qualifying Widow(er) with Dependent Children	Under 65	$15,300
	65 or older	$16,450

For dependents:

Unearned income is considered income that was not earned by working, such as investment income or gifts.

Filing Status	Age at the end of 2011	Minimum Income
Single	Under 65 (and not blind)	$5,800 earned (OR $950 unearned)
	65 or older OR blind	$7,250 earned (OR $2,400 unearned)
	65 or older AND blind	$8,700 earned (OR $3,850 unearned)
Married*	Under 65 (and not blind)	$5,800 earned (OR $950 unearned)
	65 or older OR blind	$6,950 earned (OR $2,100 unearned)
	65 or older AND blind	$8,100 earned (OR $3,250 unearned)

*Special requirements for married dependents: You are required to file a return if your spouse files a return and itemizes deductions, and your total income is $5 or more.

Important facts about the EITC

EITC stands for the Earned Income Tax Credit and it is one of the most powerful tools the government has for bringing families out of poverty. The EITC can bring a federal income tax refund from $2 to $5,666 if the individual circumstances are right. The IRS estimates that one in five families that qualify for this large credit fail to claim it. Here are some things to remember:

• The EITC reduced the amount of tax owed and may result in a refund (remember the last blog post here--this is a refundable credit)
• The Benefit Bank asks questions and calculates whether clients are eligible to ensure that ALL potentially eligible clients are presented with the choice to take the credit or not
• Learn more here!