Q.In April I filed with the IRS for an extension on my tax return. I still have not filed a completed return, even though my extension ran out. What is going to happen?
A.The IRS will file the return for you based on information it has about your income. It will look at W2 forms filed by employers you had during the tax year and 1099 statements of interest and dividend income filed by your banks, brokerage firms and mutual fund companies.
The IRS will then take the standard deduction for you and figure out if you owe any tax. If you had more tax withheld than you owe, you would be entitled to a refund. However, the IRS doesn't have to voluntarily send you a refund. You have to file for a refund and you must do so within two years of the time the tax was paid, or withheld.
Q.I am divorced, work part-time as a receptionist and will earn approximately $5,000 this year. Will I have to file a tax return in April?
A.For tax year 1990, a return must be filed by all individuals whose gross income is $5300 or more. (If you are blind or elderly, the break point is $6,100 and if you are blind and elderly, $6,900.)
Based on your earnings as a receptionist solely, you would not have to file a tax return. Gross income, however, is not just salary. You have to include in gross income the following items: Alimony, fees, interest and dividend income, commissions, rents, profits from any business interest, and gains from the sale of property including stocks, bonds and mutual funds.
Therefore, when you go to determine if you must file a tax return for 1990, you have only a $300 leeway. If you are receiving alimony and have some bank interest, you will undoubtedly be over the $,5300 free ride.