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Uber Member
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Feb 8, 2008, 10:31 AM
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Capital Gains
Hello, tax experts:
If you have both long and short term capital gains, but when added to your income you still do not meet the minimum income required to file, do you need to file?
That's a convoluted way of asking, even though I’m not obligated to file a return due to my limited income, does the fact that I had capital gains (even little ones) change that?
excon
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Expert
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Feb 8, 2008, 11:30 AM
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No, the fact that you had capital gains as opposed to earned income doesn't matter. I am assuming here that you are not being claimed as a dependent on someone else's return, because then it would matter. See the following site for a quick determination of whether you need to file or not:
Do You Need to File a Federal Income Tax Return?
Also, you may want to file even though you are not obligated to do so, for example if you had any earned income from which taxes were withheld that you would like to get back. Also, the tax rebate plan just passed by congress will rely on 2007 tax filings to determine who gets what, so you should consider filing if you think you may qualify for a check.
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Tax Expert
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Feb 8, 2008, 01:00 PM
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No, if your total income is below the filing requirement, you are not required to file. For 2007, for Single nondependent, it is $8,750.
You may file only to get refund of withheld taxes.
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Expert
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Feb 8, 2008, 01:34 PM
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ExCon - we're getting a bit off base from your original question, but here goes: the details of exactly how the IRS will calculate rebate checks are a bit unclear right now. Here's a site that says the rebate is based on your 2007 return, but it's from a source that has a vested interest in selling tax prep software so caveat emptor:
Tax Rebate Plan - TurboTax Customer Care & Support
I suspect the IRS won't just base their rebate calculation on your SS tax payments, or on a W2 form from your employer, as this doesn't tell them what your total income is, or how many children you have. So I don't see them doing it any other way except based on your 1040 for 2007.
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