J. William Seabrooke CPA P.C.

There are generally many situations in which you are required, by law, to file a tax return annually.  If you are not sure, then a review of IRS Publication 17 (“Your Federal Income Tax-For Individuals”) at http://www.irs.gov or this link http://www.irs.gov/pub/irs-pdf/p17.pdf should answer your questions  Be sure that the Publication 17 that you are reviewing is for the current tax year as new versions are released for each tax year,  The information is located on pages 4-7 in that document.  Explanations are provided with three relevant tables:

•  Table 1-1 Filing requirements based on your gross income, or
•  Table 1-2  Filing requirements if someone is claiming you as a dependent, or
•  Table 1-3  Other situations and circumstances in which you must file

The Internal Revenue Service announced today that the filing deadline for 2010 Federal tax returns which is traditionally April 15th has been extended until April 18th to allow additional time.  The delay in filing is not related to the late December extension of the tax law provisions by the U.S. Congress.  It is related to the celebration of Emancipation Day in the District of Columbia on April 16th, a Saturday which will be observed as a holiday on Friday, April 15th.  By law, Federal tax filing deadlines can not occur on Saturday, Sundays or holidays.

There are also seven or more situations in which you may wish to file a tax return although you are not REQUIRED to do so.  Those circumstances are described below:

Do I Have to File a 2010 Tax Return? 

You must file a federal income tax return if your income is above a certain level; which varies depending on your filing status, age and the type of income you receive.

Check the Individuals section of the IRS website at http://www.irs.gov or consult the instructions for Form 1040, 1040A, or 1040EZ for specific details that may help you determine if you need to file a tax return with the IRS this year. You can also use the Interactive Tax Assistant available on the IRS website to determine if you need to file a tax return. The ITA tool is a tax law resource that takes you through a series of questions and provides you with responses to tax law questions.

There are some instances when you may want to file a tax return even though you are not required to do so. Even if you don’t have to file, here are seven reasons why you may want to:

1. Federal Income Tax Withheld   You should file to get money back if Federal Income Tax was withheld from your pay, you made estimated tax payments, or had a prior year overpayment applied to this year’s tax.
2. Making Work Pay Credit   You may be able to take this credit if you had earned income from work.  The maximum credit for a married couple filing a joint return is $800 and $400 for other taxpayers.
3. Earned Income Tax Credit  You may qualify for EITC if you worked, but did not earn a lot of money. EITC is a refundable tax credit; which means you could qualify for a tax refund.
4. Additional Child Tax Credit   This refundable credit may be available to you if you have at least one qualifying child and you did not get the full amount of the Child Tax Credit.
5. American Opportunity Credit  The maximum credit per student is $2,500 and the first four years of postsecondary education qualify.
6. First-Time Homebuyer Credit  The credit is a maximum of $8,000 or $4,000 if your filing status is married filing separately.  To qualify for the credit, taxpayers must have bought – or entered into a binding contract to buy – a principal residence located in the United States on or before April 30, 2010. If you entered into a binding contract by April 30, 2010, you must have closed on the home on or before September 30, 2010. If you bought a home as your principle residence in 2010, you may be able to qualify and claim the credit even if you already owned a home. In this case, the maximum credit for long-time residents is $6,500, or $3,250 if your filing status is married filing separately.
7. Health Coverage Tax Credit   Certain individuals, who are receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a Health Coverage Tax Credit worth 80 percent of monthly health insurance premiums when you file your 2010 tax return.

For more information about filing requirements and your eligibility to receive tax credits, visit http://www.irs.gov.
Links:

• Forms and Publications
• Earned Income Tax Credit
• First-Time Homebuyer Credit Information Center
• Health Coverage Tax Credit
• 1040 Central