How much do you have to make in order to file taxes?

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Whether you have to file a tax return depends, in part, on your filing status, age, and gross income. Please refer to the "Do You Have to File" section of the Form 1040 Instructions, Form 1040A Instructions, and Form 1040EZ Instructions to determine if you are required to file a tax return. You must file a tax return if you had net earnings from self-employment of $400 or more. This is your total self-employment income less the expenses paid in operating your trade or business, multiplied by 92.35%. For more details, refer to Topic 554, Self-Employment Tax. If you are an individual who may be claimed as a dependent on another person's return, you are subject to specific filing requirements. Refer to the instructions in your tax package or refer to Publication 929, Tax Rules for Children and Dependents. or Publication 501, Exemptions, Standard Deduction, and Filing Information. for the filing requirements for dependents. You must file a tax return if you received any amount of advance earned income credit payments from your employer during the year, or if you owe any taxes, such as:
  • social security tax and Medicare tax on tips or group life insurance,
  • alternative minimum tax,
  • tax on qualified retirement plans including an Individual Retirement Account, or other tax-favored account,
  • tax from recapture of an education credit, investment credit, low income housing credit, federal mortgage subsidy, qualified electric vehicle credit, or the native American employment credit.
Special filing requirements may apply to U.S. citizens who are residents of Puerto Rico or who have income from U.S. possessions. Refer to Publication 570 for additional information. Residents of Puerto Rico should select Topic 901. Generally, you must file a tax return if you are a nonresident alien with income from sources in the United States. For more information on nonresident aliens, select Topic 851. Even if you are not required to file a tax return, file a return if you are due a refund, because tax was withheld from any earnings. AND BECAUSE MANY, LOW INCOME PEOPLE HAVE MANY BENEFITS COMING. If you did not file a return for a previous year and you were required to do so, refer to Topic 153. If you

need help determining which form to file, refer to Topic 352.

How much tax you pay or have taken out depends on many, many things. not the least of which is what you consider tax. Many people group all their withholdings/reductions as a type of tax, but many may not be. Workers Comp, Unemployment, even FICA are all really more an insurance payment than a withholding against an income tax. And many must be paid either way, if your an employee or if your the proprietor.

The amount of tax you get back (or additional owed) depends on how much you paid in by estimated payments (if you didn't have payroll withholding, which is in itself, just a way to make estimated payments on what you may ultimately pay). And you must make estimated payments through the year (basically quarterly, the last one for 2007 is due today, 1/15/08) if your above some very low income limits, or you will pay substantial penalties and interest.

The amount of tax withheld or eventually paid also depends on other things. obviously which state (or even city) your in, the amount of income your projected on earning over the year, (which helps determine your tax bracket and the percent that may be needed), as well as your filing status, number of dependents and other deductions (like interest paid on a home, charity, medical expenses, etc). For withholding, all these things can be adjusted for your circumstances by properly and completely filling out (or changing) the Form W-4 all employers ask you to, and then properly reporting them on your 1040.

Finally, there are a number of different legal ways for the payroll provider to calculate certain aspects of the amount to withhold. but overall they make only a small difference. Remember, anything withheld is just being done as an estimated installment payment toward whatever tax, if any, you do ultimately owe. If too much is withheld, it is refunded. (Too little, and you could pay a penalty). Again, adjusting your W-4 is the way to correct for any of these circumstances. Obviously, with all the variables, everyone, even two similarpeople working in identicle jobs, will pay different taxes. and that is why each person needs to figure their return and file it. Which can be done for free at www.irs.gove and following the links.

Source: www.answers.com

Category: Taxes

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