File your return - even if not required too

Why you should file a tax return, even if you are not required to.

Written by:
Doug Zandstra CPA, CFE, EA
Certified Public Accountant
Certified Fraud Examiner
Enrolled Agent
29 Pearl St NW, Ste 225
Grand Rapids, MI  49503
616 970 3000
dougzandstra.com
email dougzandstra@gmail.com

A couple of times a year I get asked the question, "do I need to file a tax return?".  Maybe the question is from a student, or someone who didn't earn a lot.  

Well, there is a <<FLOW CHART>> that can help you determine whether or not you are required to file a tax return.

In the example below, we have a situation where a taxpayer owned a business then retired.  He thought that because he no longer has income except for Social Security, that he no longer has to file, so he just stopped filing returns.  Turns out that there are some small balances owing for some old tax returns, and the taxpayer just forgot about them.   Because the taxpayer has "unfiled" tax returns, he doesn't qualify for an installment agreement (as he tried)  Being retired and having a limited income, the taxpayer probably qualifies for an offer in compromise, but until those old returns are caught up, he can't apply for that either. 

When in doubt, just complete the return, even if its all zeroes.  There are tax credits that you may qualify for, and there are numerous unknown situations that come up where you want to avoid a notice like the one below.