Income determines need to file taxes
WHAT'S THE LAW?
By Legal Aid Society of Hawaii
Question: I made $7,000 in wages and had no other income except for a little interest ($20). I am 25, single, have no other assets and supported myself with help from family. Do I need to file a federal and/or state tax return?
Answer: If your filing status is single and you're younger than 65, you don't need to file a federal tax return since your gross income was less than $8,450 (the threshold for tax year 2006). Even if you're not required to file, however, you should file a return to get a refund of federal income tax withheld or tax credits you might be entitled to (like the Earned Income Tax Credit and, for this year only, the Telephone Excise Tax Refund). As for the state, you must file a return as your income is above the state threshold of $2,540 for tax year 2006. Even if not required to file a state return, you should file to get a refund of credits you could be entitled to.
Q: I'm in the process of a divorce. I'm still married to my spouse, but we separated in August. What is my filing status?
A: Your filing status will determine which tax rates apply to your taxable income and will affect the rest of your tax return. For example, certain credits like the Earned Income Tax Credit may only be claimed with certain filing statuses. Since you lived with your spouse during part of the last six months of the year, you can file as either "Married Filing Jointly" or "Married Filing Separately." Had you separated from your spouse before July 1, 2006, you could have filed as "Head of Household." Consult a tax professional regarding your specific situation.
To ensure compliance with IRS requirements, we inform you that any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction or matter addressed herein.
Legal Aid Society of Hawaii operates statewide. Practice areas include housing, public benefits, consumer and family law but not criminal law. For information, call 536-4302. Submit questions by e-mail to
dawalla@lashaw.org or by U.S. mail to Legal Aid Q&A, 924 Bethel St., Honolulu, HI 96813.