Most people file a tax return because they have to, but even if you don’t, there are times when you should—because you might be eligible for a tax refund and not know it. The six tax tips below should help you determine whether you’re one of them.
1. General Filing Rules. Whether you need to file a tax return this year depends on several factors. In most cases, the amount of your income, your filing status, and your age determine whether you must file a tax return. For example, if you’re single and 27 years old you must file if your income, was at least $12,000 ($24,000 if you are married filing a joint return). If you’re self-employed or if you’re a dependent of another person, other tax rules may apply.
2. Premium Tax Credit. If you purchased coverage from the Marketplace in 2018 you might be eligible for the Premium Tax Credit if you chose to have advance payments of the premium tax credit sent directly to your insurer during the year; however, you must file a federal tax return and reconcile any advance payments with the allowable premium tax credit.
3. Tax Withheld or Paid. Did your employer withhold federal income tax from your pay? Did you make estimated tax payments? 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, but you have to file a tax return to receive the refund.
4. Earned Income Tax Credit. Did you work and earn less than $54,884 last year? You could receive EITC as a tax refund if you qualify with or without a qualifying child. You may be eligible for up to $6,431. If you qualify, file a tax return to claim it.
5. Additional Child Tax Credit. Do you have at least one 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.
6. American Opportunity Credit. The AOTC (up to $2,500 per eligible student) is available for four 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.
If you have any questions about whether you should file a return, please contact us.