Tax Insights

Your Guide to State, Local, Federal, Estate + International Taxation

Here’s why you should file a tax return

backup withholding, tax reformMillions of Americans every year are required to file a tax return, and it’s a good idea for everyone to determine whether or not they should file a return this year. Individuals with low income may not be required to file a tax return, but it may be a good idea to file if you can receive a refund.

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Some reasons you should file a tax return include:

  • If you had any federal withholding on your paychecks
  • If you made any estimated tax payments
  • If you overpaid in the prior year and had it applied to this year’s tax liability

By prepaying tax above, you’ll want to determine if you can receive a refund in the current year.

Some general criteria that determine whether you should file a return include your age, income and filing status of the current year. Other reasons you may need to file include if you are self-employed or can be claimed on someone else’s return.

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The Earned Income Credit may be another good reason to file a tax return! The Earned Income Tax Credit is a refundable credit that is for low to middle income earners and benefits those who have children. In order to qualify for this credit, you must be between 25 and 65 and make less than a certain amount of money per year. For example, a single person with one child making less than $45,884 can get a credit of $3,526!

The Child Tax Credit is another great reason to file a tax return, if you have a child that is under the age of 17 you could qualify for a credit of $2,000 per child.

The IRS has lots of resources available on the website. Contact your Henry+Horne adviser with any questions.

James Van Houten IV