Can I Claim Tax Write-Offs if I Earn Below Taxable Income Threshold?

The Internal Revenue Service sets a threshold level for income and requires you to file tax returns if your income exceeds that amount. Still, even if your income does not exceed that set limit, it still may benefit you to file tax returns. In addition to filing the forms, you can, and should, also claim any deductions or write-offs that you are entitled to, to maximize other benefits you can receive as well as carry forward some deductions into future years.

Filing Thresholds

You may claim tax deductions if your income is below the threshold amount for mandatory tax filing. This amount varies depending on your filing status. Single people have to file income taxes if they earn more than $9,750 as of 2012. Married taxpayers filing jointly must file if their combined income is above $19,500 if filing a joint return, while head-of-household filers must file if their income is above $15,700. Married people filing separately see their required filing income level drop to $3,800. If you earn below these amounts, filing income taxes allows you to take advantage of any refunds you may have coming to you. You may be entitled to a refund because of taxes withheld at a job, or to take advantage of any refundable tax credits, such as the Earned Income Tax Credit.

Earned Income Tax Credit

The Earned Income Tax Credit is a refundable tax credit for people who have earned income from a job and have low to moderate overall incomes. It originally began in 1975 as an incentive for people to work. It is one of the most common reasons why people file income tax returns, even if they have no tax liability. The EITC is a refundable credit, meaning that if your EITC exceeds the amount that you owe in taxes, you will receive the amount as a refund.

Qualifying for EITC

The EITC is available to you depending on your income, filing status and if you have one or more qualifying children. By reducing your income through taking any write-offs possible, you may more readily qualify for the EITC or for an increased amount of the credit. In addition, you may increase the amount of the credit for which you are eligible.

Other Reasons to Claim

Even if your income was less than the amount that requires you to file your income taxes, and you have no refund coming to you, it may still benefit you to file your income taxes and claim write-offs. If you had excessive capital losses, you can carry some of the excess forward to next year. For example, you can write off $3,000 in any one year of capital losses, but you can write off any extra in the next year, or use the loss to offset any gains that you have had. You must file your taxes and declare these losses to take advantage of this.