Do I need to file a tax return for 2011?

It is possible that an individual may not be required to file a tax return if their income was below certain levels.  These vary based on age, filing status and type of income received.  There are advantages to filing a return even if you are not required to.  You may be eligible for a refund of any withholdings taken from your paycheck and you also may qualify for certain refundable credits.  Another consideration is the fact filing a return starts the statute of limitations.

Here's a filing requirement guide for most taxpayers

As previously mentioned there are benefits to filing a return even if not required.  Potential benefits include:

• Federal/State tax withheld  If you had tax withheld from your pay by your employer, made estimated tax payments or had an overpayment from a prior year that was applied to the current tax year, you may be able to get a refund if you file a return.
• Earned Income Tax Credit  If you did not make a lot of money this year you may be eligible for the EITC.  This is a refundable credit and can be claimed by a taxpayer without a child (under certain income limits).
• Additional Child Tax Credit  If you have at least one qualifying child and were unable to take advantage of the full Child Tax Credit you may be eligible for the additional credit.
• American Opportunity Credit  A student in the first four years of post secondary education may qualify for this credit.  The maximum amount available is $2,500 and this is a partially refundable credit (40%).  So even if you do not owe any tax you can get up to $1,000 cash back.
• Adoption Credit  It is possible that you may be able to take this refundable credit to offset qualified adoption expenses.
• Health Coverage Tax Credit  In 2011 certain individuals may be eligible to take the credit.  Those individuals are receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation.  The qualified individuals can claim can claim a significant portion of their payments made for qualified health insurance premiums.

As you can see from the list above their are advantages that you may not normally think of.  My intention isn't to give you the "hard sell", the opportunies are there if a taxpayer is interested.  In today's economy the chance to claim money that is rightfully yours can be to your benefit.  If you have questions or need further clarification you can check the IRS website, consult your tax professional or feel free to contact me.