Do I Need To File an Income Tax Return?

If you have modest or low income, you might not need to file a 2011 tax return.

But you might want to -- so you get a refund on any federal income tax withheld, or if you qualify for the earned income credit, which can put money in your pocket.

• Your filing status, that is, whether you file as a single person or as a married couple filing jointly
• Your age, whether you are under age 65, or 65 and older
• Your gross income

All the income you received that is taxable, whether in the form of wages and tips, self-employment income, taxable interest and dividends, capital gains, rents, goods, property or services.

For most people, this does not include Social Security benefits.

There are exceptions to these guidelines.

• If you can be claimed as a dependent by another taxpayer, the income threshold for filing is generally lower than the chart above. For instance, children and teens who work must file a tax return only if they earn more than $5,800 a year.
• If you are self-employed and your net earnings (income minus expenses) are more than $400, you need to file and pay self-employment tax. (You won’t receive credit toward Social Security benefits if you don’t report and pay this tax.)

Many people who are not required to file a return choose to do so for several reasons. Among them:

• To recover money withheld from their wages by employers.
• To receive the Earned Income Credit, or EIC, money paid by the government to qualifying workers with modest income. 
• To receive other "refundable" credits. Like the EIC, these credits can be are paid to filers even if they owe no taxes. They include the Additional Child Tax Credit and the American Opportunity college credit, which replaced and increased the old Hope Credit in 2010.