Do You Have To File Income Tax Returns?

            The rules for filing a Pennsylvania income tax return and a federal income tax return are different. If you received Pennsylvania gross income in excess of $33 during 2010, you are required to file a Pennsylvania income tax return even if no tax is due with the return. This applies to PA residents, non-residents and part-year residents. Additionally, Pennsylvania law does not exempt a minor from the above requirements even if the minor is claimed as a dependent on someone else’s federal income tax return. Additionally, if you incurred a loss from any transaction as an individual, sole proprietor, partner in a partnership or PA S-corporation, you are required to file a Pennsylvania income tax return.

            The federal rules for filing a tax return are much different. For single individuals, you must file a tax return with the IRS if your gross income was at least $9,350. But if you are age 65 or older, you gross income must be at least $10,750 before you must file a return. For married taxpayers choosing to file jointly, you must file a federal income tax return when your gross income is at least $18,700. If however, married taxpayers choose to file separately, you must file a return when your income is $3,650 or greater. Lastly, if your status is head of household or qualifying widow(er), you must file a return when your gross income is $12,000 and $15,050 respectively.

            There are some exceptions to the above rules. You must file a return in the following situations. 

(1)   Children who are claimed as dependents on someone else’s return but have unearned income of more than $950 or earned income of more than $5,700

(2)   Dependents who are age 65 or older and had unearned income of more than $2,350 or earned income of more than $7,100

(3)   You owe any special taxes including (a) alternative minimum tax (b) additional tax on a qualified plan (c) household employment tax (d) social security and Medicare tax on tips you did not report to your employer (e) recapture taxes (f) recapture of the first-time homebuyer credit

(4)   You received any advance earned income credit from your employer

(5)   You had net earnings from self-employment of at least $400

            Lastly, if you are not required to file a return, but had federal income tax withholding or are eligible for a refund, you must file a tax return to claim your refund.

Barry L Weller, EA is the president of Barry Weller & Associates with offices at 216 E Philadelphia Ave, Boyertown, PA 19512   Phone (610) 367-8280    He is an enrolled agent, licensed to represent taxpayers before the IRS.