About Income Taxes

• Most employed individuals have income taxes withheld from their regular paychecks. At the end of each year, individuals file tax returns to determine if they owe additional tax to the government. The government's tax department calculates the tax an individual owes based on his taxable income and compares it to the amount of tax he has paid throughout the year. If the individual hasn't paid enough tax, he must pay the balance. If he has paid too much tax, the government will issue a refund.
  
  

When to File

• In Indiana, you must file an income tax return if your income exceeds the total of your Indiana exemptions. You must also file an Indiana tax return if you live in another state but earned income in Indiana. In this case, you must file a return regardless of how much you earned.
  
  

Exemptions

• To calculate your Indiana exemptions, allow $1,000 for every exemption you claimed on your federal income taxes and for every individual included on your return that is blind, disabled or over 65 years of age. If your annual income exceeds this amount, you must file a state income tax return. However, if your income doesn't exceed this amount, filing a return is optional.
  
  

Considerations

• Though Indiana doesn't require you to file a state income tax return if your exemptions exceed your income, doing so may be beneficial in certain circumstances. If you have Indiana credits, such as the earned income credit, or if your employer withheld taxes from your regular paychecks, you may qualify for a refund if you file a return.