Thursday, June 25, 2009

Did you forget to file your taxes?

If you forgot to file your return this past year and you know that you’re going to owe money to the IRS, it is in your best interest to file as soon as possible to avoid failure-to-file penalties. The IRS may file the return for you, which will never be in your favor. This is called an SFR- Substitute for Return. If you don’t pay what you owe, keep in mind that on top of interest charged, you’ll also have to pay failure-to-pay penalties, which can very quickly add hundreds or even thousands on top of what you owe.

Of course you may be in a situation where it is not necessary to file a return. The questions below, which come directly from the IRS website, will help you determine if you need to file a Federal Income Tax return.

Keep in mind that in many cases you may be eligible for a refund, so though it is not required that you file, it is in your best interest so that you can receive the refund.

To determine if you need to file a Federal Income Tax return for 2008 answer the following questions, also found on the IRS website at this link:,,id=96623,00.html

Occasionally, individuals have one-time or infrequent financial transactions that may require them to file a Federal Income Tax return. Do any of the following examples apply to you?

• Did you have Federal taxes withheld from your pension and wages for this tax year and wish to get a refund back?
• Are you entitled to the Earned Income Tax Credit or did you receive Advance Earned Income Credit for this tax year?
• Were you self-employed with earnings of more than $400.00?
• Did you sell your home?
• Will you owe any special tax on a qualified retirement plan (including an individual retirement account (IRA) or medical savings account (MSA)? You may owe tax if you:
o Received an early distribution from a qualified plan
o Made excess contributions to your IRA or MSA
o Were born before July 1, 1937, and you did not take the minimum required distribution from your qualified retirement plan.
o Received a distribution in the excess of $160,000 from a qualified retirement plan.
• Will you owe social security and Medicare tax on tips you did not report to your employer?
• Will you owe uncollected social security and Medicare or Railroad retirement (RRTA) tax on tips you reported to your employer?
• Will you be subject to Alternative Minimum Tax (AMT)? (The tax law gives special treatment to some kinds of income and allows special deductions and credit for some kinds of expenses.)
• Will you owe recapture tax?
• Are you a church employee with income in wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security or Medicare taxes?

If you're still unsure of whether or not you need to file, contact a Tax Professional, or look further on the IRS weblink provided above.

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