This may come as a surprise to you but there are some individuals that do not find the tax-filing period a headache. Shocked? Well don’t be! The individuals that do not find the tax-filing period a headache are people that aren’t eligible for it. There are certain individuals that do not file taxes as the internal revenue service does not require them to do so. However, not everyone is that lucky and many people have to file taxes. Therefore, it is important to know what is minimum income to file taxes and who’s eligible for fling taxes.
When the time for filing taxes comes around, America runs into frenzy. The purpose of filing taxes is to report everything you earned in the previous year in order to claim deductions/exemptions you’re entitled to. Knowing what is minimum income to file taxes is the first step in the process. You can report your income and claim the deductions/exemptions to lower your tax bill.
As part of your tax filing process, you also need to report the payments withheld for you by your employer and the one’s that you made directly to the internal revenue service. However, before you do all that it is important that you find out if you’re eligible for filing taxes or not. What is minimum income to file taxes? Following are the eligible individuals and their income bracket.
- Single individuals younger than 65 are exempted from filing taxes if their annual income is less than $10,150
- Single individuals older than 65 are exempted from filing taxes if their annual income is less than $11,700
- For Head of Household younger than 65 the minimum required annual income is $ 13,050
- For Head of Household older than 65 the minimum required annual income is $14,600
- For Married Individuals younger than 65 filing jointly, the combined annual income needs to be $ 20,300 or more
- For Married Individuals older than 65 filing jointly, the combined annual income needs to be $ 22,700 or more
- For Married Individuals (younger and older than 65) Filing Separately, the required annual income is $3,950
- For Widow/Widower (younger than 65) with dependent child, the required annual income is $ 16,350
- For Widow/Widower (older than 65) with dependent child, the required annual income is $ 17,550
If you do not fall in either of the above-mentioned categories then you’re exempted from filing taxes. Therefore, it is important to know what is minimum income to file taxes. If you’re eligible for filing taxes then you need to remember that you’ll get a refund if the amount of tax due is less than the amount of payments you made.
However, you’ll need to cover the difference if the amount of payments you made is less than the amount of tax due. It is important for you to know what is minimum income to file taxes. In order to qualify for tax return filling, individuals need to fall within a certain income bracket. If you don’t fall in the stated income bracket then you do not need to file taxes.
Once you know that you’re eligible for filing taxes, the next thing would be finding out deductions/exemptions you’re entitled to. Knowing the deductions/exemptions you’re eligible for is just as important as knowing what is minimum income to file taxes. You will end up overpaying your taxes if you do not find out the deductions/exemptions you’re entitled to. This is a mistake most Americans make. Make sure that you do not commit the same mistakes and lose the chance of minimizing your tax. You do not need to anything special to minimize your taxes. You simply need to monitor your everyday activities so that you can report them to claim deductions/exemptions .It is extremely important to know what is minimum income to file taxes and the deductions you’re eligible for .Following are a few things that make you eligible for tax deductions/exemptions.
Contributing to Charity
When filing tax returns, most people forget to report their charitable contributions. It is highly likely that you’re one of them. The internal revenue service accepts both the non-cash items and the monetary funds as charitable contributions. Anything from old clothes to used book is considered as a noncash item. The monetary contributions may include pay orders and checks. If you personally drove to the charity to make contributions then you can also include the fuel expense and parking charges you paid at that time. This will help you to further lower your tax bill.
Student loan repayment
If you ever took a student loan then getting a tax rebate is a possibility .If you’re repaying a student loan that you borrowed for your education then you can claim tax deductions of more than $2000 when filling your tax returns. The deduction is also available to you if you took the student loan for your wife or children. However, it is imperative that you prove to the internal revenue service that you took the loan solely for the purpose of you or your wife/children attending college/university.
Job Hunting Costs
A jobless person has so much to worry about and if he also has to pay a good number of taxes then his life becomes nothing less than a calamity. Fortunately, there’s a solution to this. If you’re jobless or were during most parts of the previous year then you can use this to get tax deductions.
You can reduce the amount of taxes you’d need to pay by reporting all the job hunting related costs that you incurred during the previous year. The Job hunting related costs include the costs of mailing the documents, fees of recruiting agencies, costs of printing and cab fess etc. If you want to get tax deductions then you must note down all such expenses and report them at the time of filing taxes.
House renovating costs
You can get a tax benefit by reporting the costs you incurred for renovating your house when filling tax returns. Therefore, it is important for you to note down the improvements you make to your house. However, before you claim tax deductions for house renovations you must prove to the internal revenue service that the improvements made your house more energy efficient.
The Non-Business Energy Property Credit allows you claim a 10% tax deduction on the cost you incurred for making improvements to your house. The improvements include getting your roof repaired and installing new windows/doors.
Natural disaster losses
If you’ve been a victim to a robbery or a natural disaster then you can report such losses when filing tax returns to claim tax deductions. In order to compensate you for the losses you incurred, the state will provide you tax deductions. However, you must fulfill the criteria set for claiming deductions as result of such losses. Also, if your insurance company reimbursed you for your losses then you cannot claim tax deductions for natural disaster losses from the internal revenue service.
After you find out what is minimum income to file taxes, check the tax deductions/exemptions you’re eligible for. This would allow you to lower your tax bill and would ensure that you do not pay any unnecessary taxes. You must know what is minimum income to file taxes and the deductions you’re eligible for.
After you’ve figured out what is minimum income to file taxes and the tax deductions/exemptions you’re eligible for, it will be time for you to prepare your taxes. In order to successfully prepare your tax returns, there are a few things that you must ensure. Tax preparation will become a source of inconvenience for you if you do not have a structured approach. If you want to avoid complications related to tax preparation then there are certain steps that you must follow .If you want to successfully prepare your tax returns then you must ensure the following steps.
Fill your 1099 and W-2 forms
Once you know what is minimum income to file taxes and the deduction you’re eligible for, the next step would be figuring out the forms you need to file taxes. Two forms that are extremely important for preparing taxes include form 1099 and form W-2. Therefore, you must ensure that you have both of them. The W-2 form is the wage and tax statement that your employer provides to the government to inform you about the wages it paid you and the taxes it collected from you. Another important form for preparing taxes is the form 1099.The purpose of the form 1099 is to report all the income you got apart from your salary and wages. This includes the payment you received from individuals and businesses. Therefore, you must present this form along with your W-2 when filing taxes.
Choose the appropriate tax form
If you do not want any hindrances in your tax preparation process then you must not depend solely on your tax preparer for preparing your taxes. It is important for you to have a proactive approach to tax preparation. A proactive approach means that you find out about the appropriate tax form before filing taxes.
It is important for you to check the internal revenue service website to find out about that tax form that you’ll need. Once you’ve found out about the appropriate tax form, you can fill it through the available software.
Get help from a tax preparer
You can hire a tax preparer for preparing your taxes if you find it difficult to do it yourself. Tax preparers have the appropriate expertise and do not charge much. Alternatively, you can contact an accountancy firm and ask them to prepare your taxes. An accountant is crucial in your tax preparation process as the accountant will help you with every little detail related to your taxes. The accountant will tell you about all the expenses you need to list for deductions/exemptions and will also give you useful advice for the next tax year.
Once you know what is minimum income to file taxes and the deductions/exemptions you’re eligible for, it would time for preparing your taxes. In order to successfully prepare your taxes, you must fill out forms 1099 and W-2, choose the appropriate tax form, and get help from a tax preparer. Once you’ve successfully prepared your taxes, it would be time to file your taxes.
After you’ve found out what is minimum income to file taxes, found out the deductions/exemptions you’re eligible for and prepared your taxes, it would be time to move on the most important part—filing your taxes. In order to successfully file your taxes, there are certain things that you must ensure. You can successfully file your tax returns by using the following steps.
Choose your filing method
The first and foremost step in filing your taxes is choosing a filing method. Many Americans do not proactively think about an appropriate tax filing method and as a result end up wasting a lot of time. The most frequently asked questions regarding tax filing include should I go online? Do I mail the tax forms in? Do I need different things for different filing methods? Etc.
While the answer to the last question is the same for everyone (you do not need different things for the different filing methods), whether you choose to mail your taxes or file them online is entirely up to you. However, you can ensure that you make the best possible decision by gaining a bit of knowledge of the subject i.e. tax filing method. The tax filing methods include online tax preparation services, taxes by mail, tax software, tax advisors, and on-spot fillable forms.
Getting your tax forms and other important materials ready
After you choose an appropriate filing method, the next step in the process is getting your tax forms and other important materials ready. Before getting your forms, you must gather all the relevant information. Following are the things you’ll need for filing taxes.
In order to file taxes, you need to get a W-2 form from your employer. Generally, employers will send the W-2 Form to the employees themselves. However, there may be occasions when they don’t. In such situations, it is imperative that you ask your employer for a W-2 form. Also, there are occasions where the employer will provide you with the information pertaining to the W-2 form instead of mailing it to you. Therefore, make sure that you get all the relevant information.
Form 1099 SSA
You’ll automatically receive form 1099 SSA if you got social securing during the previous year.
Form 1099 G
If you take an income tax refund or unemployment benefits then you’ll receive Form 1099 G. Also, you can download the form from the internal revenue website or your local government website.
Form 1099 B, 1099-R, 1099 DIV and 1099 INT
The forms for the retirement distributions, dividends, and interest you receive from mutual fund companies, brokers, or banks include form 1099 B, Form 1099-R,1099 DIV and 1099 INT. You must use these forms to report the payments you receive from the different financial institutions.
If your mortgaged your home then you need to get a form 1098 from your lender.
Other important materials
Apart from the different tax forms, there are a few other important materials that you need to have before you can file taxes. Following are the other materials that you must possess.
Social security numbers
Social security number is something that every taxpayer needs. You’ll need social security number for each and every one of your dependents. This includes your wife, your children, and other dependent household members.
Electronic tax Filing PIN
You’ll get an electronic filing PIN if you filed your last year’s taxes electronically. If you have one, you can use it to file taxes this year as well. Also, you can contact the IRS to provide you the electronic tax filing PIN if you lose it.
Income and deductions record
It is important that you gather proof of all the income you received during the previous year. Also, you must get the receipts of the charitable contributions you made and the cost you incurred to get tax deductions.
Bank routing number
You’ll need a bank routing number if you want to receive a refund from the internal revenue service. Your bank’s routing number are the first nine numbers that appear at the bottom left of your checks.
Bank account number
In order to obtain your account number, visit your bank’s website or the website of the financial institution where you keep your money. Alternatively, you can look up this number on your check. The bank account number is present on the bottom right of your check.
Knowing what is minimum income to file taxes is the first step in the tax filing process. Once you know what is minimum income to file taxes, the tax deductions/exemptions you’re eligible for, the tax preparation method and the things you’ll need to successfully file your taxes, you’ll be all ready to file your taxes.
After you find out what is minimum income to file taxes, you’ll need to get the serious business started .The serious business of tax filling includes finding out what things make you eligible for tax deductions, the tax forms you’ll need from your employer and the government, the tax forms you’ll need to fill and the information/materials you’ll need for filing your taxes. Once you’re done doing this, you’ll be ready to file taxes.