Significance

• All taxpayers who meet the IRS filing requirements are required to file an income tax return regardless of whether you owe tax, are owed a refund or break even. The purpose of filing a tax return is for the IRS to assess how much you paid in tax during the year versus the amount of tax for which you were responsible. Taxpayers can also owe money, or be owed money, based upon a variety of credits and deductions, thus it is often difficult to determine if you owe tax or are owed a refund until you actually file your return.
  
  

Income Limit

• If you earn in excess of the dollar amount required to file, then you must file an income tax return. Income includes, wages, salaries, tips, stock options, interest,dividends and disability benefits paid through your employer. Workers compensation, welfare benefits and long-term care contracts are excluded as income.For 2009, the general IRS income guidelines are as follows: if you earn over $9,350 if single, $12,000 if head of household, $18,700 if married filing jointly, $3,650 if married filing separately or $15,050 for a qualifying widow (er), you are required to file a return.
  
  

Exceptions

• The only exceptions to the general filing requirements are for taxpayers over 65. They're allowed to earn more than ordinary taxpayers before they're required to file an income tax return. For 2009 the income limits for elderly taxpayers are as follows: $10,750 if single, $13,400 if head of household, $20,900 if married filing jointly (or $19,800 if only one spouse is 65 or older) and $16,150 if a qualifying widow(er). Social Security is taxed at a lower rate than ordinary income but should be included on your return.
  
  

Considerations

• Even if you do not meet the IRS requirement to file, it still may be in your best interest to do so. If you had federal tax withheld from your payroll check or paid estimated tax but did not meet the filing requirements, then you should file your return in order to qualify for a refund of the taxes you paid. You may also qualify for special tax credits in certain years.
  
  

Warning

• If the IRS determines that you should have filed a federal return but did not, they may file a federal return on your behalf. If the IRS files for you, then it will not include any of the credits or deductions for which you may be eligible, thereby increasing your overall tax liability.