Federal Income Tax Returns

Anyone trying to figure out if they have to file a tax return has the opportunity to read through two pages of IRS instructions. Essentially, all of those instructions can be condensed into three high-level rules of thumb for the tax years 2020 and 2021:

• If the filer's gross income was more than $12,200 and they are not claimed as a dependent on another's tax return, they may have to fill out a return.

• If the filer is claimed as a dependent on someone else's form, and the filer's unearned income was greater than $1,050, they might have to file a return.

• If the filer is claimed as a dependent on someone else's form, and their earned income is $12,200 or more, they might have to file a return.

Gross income is merely the sum of all earned income (such as wages) plus unearned income (interest income). Pages 8 and 9 of the Form 1040 instructions have a much more detailed approach to figuring this out. Anyone close to these thresholds needs to look at these instructions to see if they need to file a tax return.

Anyone that is a college student and their employer withheld federal income tax, may have overpaid and may be entitled to a tax refund. Form 1040 EZ is simple to fill out and worth the effort, especially if there is a chance of receiving money back from the government.

Typically, the tax filing deadline is April 15th. But if the 15th falls on a Friday, the deadline will be Monday, April 18th. If the 15th falls on a Saturday, the deadline will be Tuesday, April 18th. If the 15th falls on a Sunday, the deadline will be Tuesday, April 17th.

The above rules have been in place since 2005, when Emancipation Day (April 16th) became a public holiday in Washington D.C.

The IRS is extremely sensitive to the time it takes to fill out tax forms. As a matter of fact, the instructions usually contain an estimate of the time necessary to fill out each form.

The rule of thumb for Form 1040 is to keep it simple. Unless a taxpayer believes they are entitled to numerous tax deductions, they will want to complete the shortest form possible. The three options include:

Once a tax return is completed, there is either good news or bad. The bad news is easy to figure out, since it involves writing out a check to the IRS. The good news is easy to recognize too, because it's a tax refund, which leads to one final tip:

Consider filling out tax forms as early as possible after the first of the year. Even if this is just an estimate, try to get an idea if money is owed or if there will be a refund.

Anyone that thinks they're getting a refund should fill out their tax return as soon as possible. This way the tax refund is received sooner. Anyone that owes additional income taxes may want to wait until they're closer to the April 15th deadline before sending in their return.

In the good old days, the earlier someone filed their return, the faster they would get their refund. Today's age of electronic tax filing allows individuals to opt for electronic funds transferred directly into a bank account.