Do I Need to File a Tax Return This Year?

One is required to file a federal income tax return if their income is above a certain level, which varies depending on their filing status, age and the type of income they receive.

However, the Internal Revenue Service reminds taxpayers that some people should file even if they aren't required to because they may get a refund if they had taxes withheld or they may qualify for refundable credits.

Even if one doesn't have to file for 2011, here are six reasons why they may want
to:

• Federal Income Tax Withheld: One should file to get money back if their employer withheld federal income tax from their pay, they made estimated tax payments, or had a prior year overpayment applied to this year's tax.
• Earned Income Tax Credit: One may qualify for EITC if they worked, but did not earn a lot of money. EITC is a refundable tax credit; which means one could qualify for a tax refund. To get the credit, one must file a return and claim it.
• Additional Child Tax Credit: This refundable credit may be available if a person has at least one qualifying child and did not get the full amount of the Child Tax Credit.
• American Opportunity Credit: Students in their first four years of postsecondary education may qualify for as much as $2,500 through this credit. Forty percent of the credit is refundable, so even those who owe no tax can get up to $1,000 of the credit as cash back for each eligible student.
• Adoption Credit: One may be able to claim a refundable tax credit for qualified expenses paid to adopt an eligible child.
• Health Coverage Tax Credit: Certain individuals who are receiving Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation, may be eligible for a 2011 Health Coverage Tax Credit.

Eligible individuals can claim a significant portion of their payments made for qualified health insurance premiums.