At tax-time, “Do I need to file a tax return?”, is a common tax question we hear.  This question comes up because people think they don’t make enough money to file their taxes.  The IRS has income filing requirements necessary for you to file, however there are cases where your income may be less than the requirements, but you could be leaving money on the table if you don’t file your taxes.

Every year the IRS reports about 1 billion dollars in unclaimed refunds.   The majority of these tax refunds are due to people not filing taxes, because their income is lower than IRS income filing guidelines.

The IRS guidelines for filing taxes are:

Filing Status Age at 12/31/2012 Gross Income
Single Under 65  $9,750.00
65 or Older  $11,200.00
Married Filing Separately Any  $3,800.00
Married Filing Jointly Under 65 (both)  $19,500.00
65 or Older (both)  $21,800.00
Under 65 (one)  $20,650.00
Head of Household Under 65  $12,500.00
65 or Older  $13,950.00
Qualifying Widow (er) Under 65  $15,700.00
65 or Older  $16,850.00

Here are several reasons you may get money back when you file your taxes even if you are not required to file:

  • Federal Taxes Withheld – You still may get money back if federal taxes were deducted from your paycheck.
  • Earned Income Tax Credit – You may qualify for this refundable tax credit that can give you a credit worth up to $5,891.
  • Additional Child Tax Credit – You may qualify for this refundable tax credit if you didn’t get the full Child Tax Credit
  • American Opportunity Credit  – You may be eligible for a tax credit worth $2,500 per student for the first four years of college.

Keep in mind that if you had taxes deducted from your paycheck even if you made as little as $600, you may be missing out on hundreds of dollars especially if you had taxes withheld or you can take advantage of tax credits like these.

A single person with one dependent who earned $5,000 (under the IRS income filing requirement) and had $500 federal taxes withheld, would miss out on a federal tax refund of at least $2,509* if they did not file their taxes.

* Refund amount is based on a single person making $5,000 and deducting $500 in federal taxes, claiming the Earned Income Tax Credit and the Additional Child Tax Credit.  There may be additional tax benefits available that will increase the refund amount.  The refund result was actually calculated using TurboTax software.