Friday, March 17, 2006

Filing Optional Tax Returns

Does everyone remember when they were younger, working their low-paying job at McDonald's, making minimum wage? Did you file a tax return back then? I am actually not sure if I did or not, I can't remember. I am pretty sure that I wasn't making enough to have to file back then, so I probably didn't. Little did I know, I was probably missing out on getting some money back. I do remember the government taking taxes out (because I remember complaining about it), but I may have never filed to get it back from them. I probably didn't file because I thought that I couldn't if I was claimed as a dependent on my parents tax return...however, I now know that this is not true. I still could have filed and gotten my money back.

Many low-income earners, such as students and senior citizens do not need to file taxes. That may sound like a good deal to many, but it may not be a good idea to skip filing. Many people are automatically having taxes withheld from their paychecks, but they can't get that money back if they don't file their taxes.

The basic rules for filing last year are as follows:
  • unmarried people under 65 if their gross income exceeds $8,200
  • 65 and over if their gross income exceeds $9,450
  • income thresholds for married couples are roughly twice as high,
  • head of household if their gross income exceeds $10,500
  • head of household, over 65, if their gross income exceeds $11,750
  • Students who can be claimed dependents on a parent's return if their investment income exceeds $800 or their wages and other earned income exceed $5,000
The Internal Revenue Service says that 1.7 million Americans had not yet filed their 2002 returns. They believe that those people are owed more than $2 billion in refunds, with half the refunds topping $570. That is quite a bit of money...I will need to make sure that my brothers and sisters know that they should be filing. It should also be noted that if you have not been filing and would like to get money that has been withheld back, you can file your returns for the last 3 years still.


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