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It pays for low-income individuals to file tax returns

You may gain financially by filing a tax

You may gain financially by filing a tax return even if you don’t have to. Photo Credit: iStock

I have a recurring dilemma at tax time. My main income is Social Security. I also receive $5,167 a year from my pension and a $3,924 IRA required minimum distribution. My 2014 tax withholding was $291 and it costs $200 to have my taxes done. Am I required to file a return?

 

Maybe not. But you might want to anyway if you can have your taxes done free of charge. Check with the Volunteer Income Tax Assistance (VITA) program. Its IRS-certified tax preparers offer free tax return preparation to low- and moderate-income Long Islanders. For information, call the Health & Welfare Council of Long Island at 516-483-1110 during business hours.

Whether you're required to file a 2014 tax return depends on your filing status, age and gross income. Your gross income includes some of your Social Security income if 50 percent of your Social Security plus your other gross income — including tax-exempt income — exceeds $25,000 (single taxpayers) or $32,000 (married filing jointly).

In general, you must file if you're single, under 65 and had 2014 gross income of at least $10,150; or 65 or older and had 2014 gross income of at least $11,700. You must file if you're married filing jointly, were both under 65 and had 2014 gross income of at least $20,300; or if one spouse was 65 or older and your 2014 gross income was at least $21,500; or if you were both 65 or older and your 2014 gross income was at least $22,700.

But many workers with income below these thresholds have an excellent reason to file. They may qualify for a refundable Earned Income Tax credit. The 2014 credit can add more than $6,000 to an eligible household's income.

THE BOTTOM LINE You may gain financially by filing a tax return even if you don't have to.

WEBSITES WITH MORE INFORMATION nwsdy.li/2014tax and nwsdy.li/TaxHelp

TO ASK THE EXPERT Send questions to Ask the Expert /Act 2, Newsday Newsroom, 235 Pinelawn Rd., Melville, NY 11747-4226, or email act2@newsday.com. Include your name, address and phone number. Questions can be answered only in this column. Advice is offered as general guidance. Check with your own advisers for your specific needs.

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