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Filing Your Tax Return

By David Luhman on Mon, 05/11/2009 - 23:58

Filing Your Tax Return

Do you really need to file?

Extensions and late filing

Do you really need to file?

Requirement to file depends on age and income

Many low-income elderly people needlessly file

Many dependent kids with unearned income don't file but should

Filing requirements

Find your age and filing status in the following matrix

If you make more than the indicated amount, you must file a return

Filing status

Gross income

Age under 65 Age 65 and over
Single $6,400 $7,350
Head of household 8,250 9,200
Married, joint return 11,550 13,050*
Married, separate returns 2,500 2,500

* Assuming both were over age 65

Dependents with unearned income (interest and dividends) face stricter tests

If they have any unearned income and has total income of more than $650

A dependent child who has $100 in interest and earns $600 at a job must file

Or if they have no unearned income but their earned income is greater than $3,900

A dependent child who had no interest or dividend income but who makes $4,100 at a job must file

This obviously discourages children from saving money in interest bearing savings accounts

Even if you don't have to file, you may want to file anyway to get a refund of any tax paid

Extensions and late filing

If April 15 is near and you need more time, get an automatic extension by filing Form 4868

This does not extend your requirement to pay taxes by April 15, however

Filing Form 4868 will, however, eliminate penalties for filing late

Penalties for filing late are stiff

5 percent of the amount due per month up to 25 percent

Penalties for not filing are very severe!

Possibility of 75 percent fraud penalty

What to do if it's April 14 and you have a big tax liability?

File a complete return or ask for an extension with Form 4868

Try to find the money from third parties - even use your credit card

If you can't find any money, file anyway, pay as much as you can and let the IRS "bill" you

You'll owe late-payment penalties and interest but this will probably be less than the late-filing penalty

Don't make the mistake of filing late, or worse, not filing at all!

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