Please note: This is an archived article. It does not apply to current-year tax preparation. Please see our current ​article to read up-to-date tax information.

This article will help you understand basic federal income tax rules. It includes information on filing your taxes and answers to some of the most common questions taxpayers ask.

Do I have to file?

Use Table 1.1 below to determine whether or not you are required to file a federal tax return for tax year 2013. Whether you are required to file a tax return depends on your age, filing status, and gross income. The amount of taxable income you can receive before you are required to file a tax return is called your filing threshold.

Even if you do not make enough money to have to file a tax return, you should still consider filing one. This is because at a lower income level, you may be entitled to a refund of taxes that were withheld from your paycheck during the year. You may also be eligible for other refundable tax credits, such as the Earned Income Tax Credit (EITC). The EITC will be discussed in greater detail later in this article. A tax refund means that the IRS will return money to you. If you don’t file your return, you won’t get this money back.

When do I file?

This year’s dead line to file your tax return falls on Tuesday, April 15, 2014. If you are required to file a return and fail to do so, the IRS may charge you a “failure-to-file penalty.” The penalty is normally 5 percent of your unpaid taxes for each month (or part of a month) that your tax return is late. This penalty starts the day after the tax filing due date. The total penalty will not be greater than 25 percent of your unpaid taxes.

What should I do if I am unable to file my tax return on time?

If you are unable to file by April 15, 2014, you should apply for a six-month extension by going to the IRS website and filling out Form 4868. These requests are automatically granted. But note that this is an extension of the time to file, not an extension of the time to pay if you owe. This means that you are still required to estimate your tax liability for 2013 and pay that amount. If you complete this form, you will have until October 14, 2014, to file. You will avoid a late filing penalty, and you may also reduce or eliminate interest and late payment penalties.

What if I was supposed to file a return in previous years but did not?

If you were required to file a tax return for past years but failed to do so, this should not stop you from filing for the current year. You should still get current with your filing obligations from past years because if you owe money, your debt will continue to grow because of interest and penalties.

In some cases, the IRS will file a Substitute for Return (SFR) on your behalf and will make an estimate of your income. The IRS may do this several months, or even years, after the return is due. An SFR will likely use a single filing status and will not include additional exemptions or expenses that you might be able to claim. This will usually result in a higher tax liability than you would have had if you filed your own return. Another important reason to file past-due returns is that you only have three years from the original due date to file a tax return to get a refund. This is called the statute of limitations for claiming a refund. If you need help getting current with past returns, contact the LSNJ hotline at 1-888-LSNJ-LAW (1-888-576-5529).

Table 1-1. 2013 Filing Requirements Chart for Most Taxpayers

Note. You must file a return if your gross income was at least the amount shown in the last column.

IF your filing status is. . .	AND at the end of 2013  you were*. . .	THEN file a return if your gross income** was at least. . .
Single	under 65	$10,000
	65 or older	$11,500
Head of household	under 65	$12,850
	65 or older	$14,350
Married filing jointly***	under 65 (both spouses)	$20,000
	65 or older (one spouse)	$21,200
	65 or older (both spouses)	$22,400
Married filing separately	any age	$  3,900
Qualifying widow(er) with dependent child	under 65	$16,100
	65 or older	$17,300
* If you were born before January 2, 1949, you are considered to be 65 or older at the end of 2013.

IRS Publications 554, Chapter 1

How do I find out the status of my tax refund?

The IRS website tool allows you to instantly check the status of your refund. Visit IRS.gov's Where’s My Refund? tool. You will need to have your Social Security number or Employer Identification Number (EIN), the refund amount filed on your return, and your marital status. If your return has been processed and the refund has been approved, you will see the date when you can expect to receive it.

What does filing status mean?

This term is used by the IRS to determine tax filing obligations, standard deductions, and eligibility for certain credits and deductions. It is an important factor in determining what your taxable income will be, and it is based mainly upon marital status and family situation. There are five types of filing status: Single, Married Filing Jointly, Married Filing Separately, Head of Household (HOH), and Qualifying Widow(er) with Dependent Child. Note that your marital status on the last day of the year determines your marital status for the entire year. You can choose Single filing status if you are divorced or legally separated according to state law. Head of Household generally applies to taxpayers who are unmarried. To qualify for HOH status, you must have paid more than half the cost of maintaining your household for yourself and a qualifying person. For more information about filing status, see IRS Publication 501: Exemptions, Standard Deductions and Filing Information.

What is the difference between an exemption and a deduction?

Exemptions
An exemption is a fixed amount of money that the IRS determines should be excluded from being taxed. Each person in the household is eligible for an exemption. The exemption reduces the amount of overall income on which you are taxed. The amount of the exemption for 2013 is $3,900. Let’s see how this works:

Example:
Annie is a single parent with one child. She earned $24,000 in 2013. Annie can take a personal exemption of $3,900 for herself and a dependent exemption of $3,900 for her child. Therefore, she can take a total of $7,800 in exemptions.

$24,000		Annie's Adjusted Gross Income
- 7,800		Exemptions
$16,200		Annie's Adjusted Gross Income, less exemptions

As you can see by our example, Annie will only pay tax on $16,200. This amount will be further reduced by other deductions and tax credits.

Deductions
You can also claim deductions, which are amounts subtracted from your taxable income. Generally, deductions are eligible expenses taxpayers are allowed to report. You can choose whether to take a standard deduction or to itemize your deductions. You should choose which is the most beneficial to you. A standard deduction is a set, flat amount determined each year by the IRS. Each household can take one standard deduction. You itemize your deductions when you specify item by item what was spent, such as mortgage interest, unreimbursed business expenses, medical expenses, state taxes, and charitable deductions. The dollar amount of your standard deduction depends on your filing status. The standard deduction chart below lists the dollar amount of the standard deduction for the 2013 tax year.

We will use our previous example to show how deductions work. Remember, Annie’s taxable income went from $24,000 to $16,200 when we subtracted her exemptions. Now let’s adjust for deductions based upon the following facts: Annie rents an apartment and does not have a lot of deductions, such as mortgage interest, property taxes or unreimbursed business expenses, to itemize. She will take the standard deduction. Since she is a single parent who provides all the support for her daughter, her filing status is Head of Household. Based upon the standard deduction chart below, Annie can take a standard deduction of $8,950. In our example:

$24,000		Annie’s Adjusted Gross Income
- 7,800		Exemptions
$16,200
- 8,950		Standard Deduction
$ 7,250		Annie's Taxable Income

Table 6. Standard Deduction Chart for Most People*

If your filing status is...	Your standard deduction is:
Single or Married filing separately	$   6,100
Married filing jointly or Qualifying widow(er) with dependent child	$ 12,200
Head of household	$   8,950
*Do not use this chart if you were born before January 2, 1949, or are blind, or if someone else can claim you (or your spouse if filing jointly) as a dependent. If this applies to you, please see IRS Publication 501 for more information.

What about tax credits?

Unlike exemptions and deductions, which reduce the amount of income on which your tax is calculated, tax credits reduce the actual amount of your tax. There are several tax credits available for families, such as the Child Tax Credit, the Child and Dependent Care Credit, and the Earned Income Tax Credit.

Earned Income Tax Credit (EITC)

The EITC is one of the most valuable tax credits because it is fully refundable. This means you still get money paid back to you, even if you did not owe any tax. The amount of the EITC varies based upon income and family size. You must meet several qualifications in order to claim the EITC. These include:

• Your filing status cannot be Married Filing Separately. Married couples and single people without children may qualify.
• You must have a valid Social Security Number for yourself and your spouse (if you are filing a joint tax return) and any qualifying child listed on Schedule EIC.
• You must have earned income. You have earned income if you are paid wages, you are self-employed, you have income from farming, or you receive disability income.

For more information and to see if you qualify, go to IRS website and use the EITC Assistant. If you qualify for the EITC, the amount you will get back depends on the amount of your earned income (for example, wages and tips). See the EITC table below for the maximum EITC credit amounts for the 2013 tax year.

2013 EITC
	Maximum Income Single/Head of Household	Maximum Income Married Filing Jointly	Maximum Credit
No qualifying children	$14,340	$19,680	$   487
With one qualifying child	$37,870	$43,210	$3,250
With two qualifying children	$43,038	$48,378	$5,372
With three or more qualifying children	$46,227	$51,567	$6,044

Where can I get tax help?

If you are a low-income taxpayer, there are several resources to help you file your taxes.

IRS Free File Program. This program makes commercial tax preparation software available to low-income taxpayers at no cost. If you had less than $58,000 in adjusted gross income in 2013, these programs will help you complete and file your tax return at no cost. Go to the IRS website's, Free File page. You will need to select the tax software that best suits your needs. Once you choose a preparer, you will leave the IRS website and be taken to a commercial preparer’s website. Based upon your answers to questions about income and family income, a tax return will be prepared on your behalf and filed electronically. Note that this may not be an option for filing your state tax return, so you might want to consider other in-person tax preparation options listed below.

Volunteer Income Tax Assistance (VITA). The VITA program generally offers free tax preparation services to people with incomes below $52,000. VITA sites are staffed with volunteers trained to prepare returns and are located at libraries, senior centers, and other community centers. To find a VITA site near you, call 1-800-906-9887 or 211 or see Find a Location for Free Tax Help from the IRS website.

Free Assisted Self-Help Tax Preparation (FAST Program). FAST combines the IRS Free File Program with VITA sites and can be a good way for people to prepare their own tax returns with some on-site personal assistance. Some VITA sites now make computer terminals available to taxpayers who can prepare their own taxes at no cost using a free tax preparation website.

 

This information last reviewed: Feb 25, 2014