Tax Returns: A Beginner’s Guide

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Are tax returns for everybody? Not all people have to file tax returns as there are a number of factors that need to be taken into account when filing for income tax returns such as the income you have earned for the year, the source of your income and your age. Income brackets are listed for you to see if you have to file income taxes. In the recent age bracketing and gross annual income, those who have income that exceeded the threshold of the age and filing status have to file their tax returns. So who can file tax returns?

If you are aged 65 and below you have to file Tax Return if you have earned more than nine hundred fifty dollars from your investments such as interests and dividends, or you have a gross annual income from your wages and salary amounting to five thousand nine hundred fifty for the year provided you are not blind because if you are blind, then do not need to file a tax return that is within the bracket, there is a separate computation. Sometimes it pays to file a tax return especially for self-employed individuals as they are required to file even if they do not meet the threshold in the bracket. Tax breaks and credits may sometimes be given by the government and only those who have filed will be able to avail of the refund.

There are refundable tax credits such as additional child tax and for those who are on study loan, they call it opportunity credit for students. The filing of tax returns are federal laws and if anybody is found to have purposely filed an erroneous Tax Return in an effort to make fraudulent claims against the government, those who did file and even for late filers, a penalty is given. If you are caught for fraud then you will be tried in court and sentenced to years of imprisonment. Income tax returns must be filed with accuracy and honesty.

The filing of tax returns yearly will create a history for your financial transactions that can be used to aid your future actions and dealings with banks and credit companies making it favorable for you’re to apply for home loans, salary loans, credit card and other offers from these financial institutions. Your tax return may aid in proving your income and if you have a low credit score, these tax returns are helpful to convince some lending agencies to approve your loan. Check this out: http://www.britannica.com/topic/taxation.

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