Imagine if you are sure you don’t have to file a tax return this year. Wouldn’t that be some massive burden off your back?
Not everybody must file an income tax return every year. Usually, if your total earnings for the year do not exceed specific thresholds, you do not have to file a federal tax return. The amount of income that you can make before you must file a tax return also depends upon the type of income, your age, and your filing status.
What’s Your Gross Income?
As a taxpayer, you are eligible for a standard deduction. The standard tax deduction levels you are eligible to get are mainly dependent on your age and filing status. The government determines these figures before the tax filing period and naturally increase for inflation every year.
The deduction reduces your earnings to ascertain just how much of your earnings is taxable together with other available deductions. So long as you do not have a kind of income that needs you to file a return for some other reasons, such as self-employment income, you usually do not need to file a return so long as your income will be less than your standard deduction.
For instance, in 2020, you do not have to file a tax return if All these are true for you:
- Under age 65
- Single
- Do not have any particular conditions that require you to document (such as self-employment income)
- Earn less than $12,400 (that will be the 2020 standard deduction for a single taxpayer)
In case you’ve reported and unreported income that surpasses the IRS filing threshold at the table below Federal Filing Requirements below, you’ll have to file a tax return with the IRS. Determine if you have to document by adding up all income you get from all sources, for example, earnings on a W-2 or Form 1099s and unwanted tasks or freelancing.
Suppose your income drops under the IRS filing threshold to your era and filing status. In that case, you do not have to file a 2013 federal tax return.
Let’s simplify this further. In case you’ve got regular employment, which means you work for another individual or company and get a W-2 — and nobody else may claim you on a federal tax return, you may can the table below to figure out if you need to file a return.
Locate your filing status and age bracket. If your gross income is under the right amount, you aren’t required to file a tax return. When it’s more than that amount, you need to file a tax return.
| IF your filing status is | AND at the end of 2019, you were | THEN file a return if your gross income was at least |
| Single | Under age 65 | $12,200 |
| Single | At least age 65 | $13,850 |
| Married Joint Filling | Both under age 65 | $24,400 |
| Married Joint Filing | One spouse at least age 65 | $25,700 |
| Married Filing Jointly | Both at least age 65 | $27,000 |
| Qualifying Widow(er) | Under age 65 | $24,400 |
| Qualifying Widow(er) | At least age 65 | 25,700 |
| Head of Household | Under age 65 | $18,350 |
| Head of Household | At least age 65 | $20,000 |
| Married Filing Separately | Any age | $5 |
It is vital to be aware that 65 is an integral age for seniors. Also, any married person filing separately who earns more than $5 has to file a return. Total, there’s no minimum age set for filing taxes. Tax returns are primarily about tax and income status.
Exceptions
If you can be claimed as a dependant by another citizen, the earnings threshold for filing usually is lower than the table above. For example, kids and teens who work should file a tax return only if they make more than $6,100 annually.
There may be several particular considerations for dependents under 19 or dependents full-time students under 24. The IRS provides information for dependents.
What if you merely get Social Security benefits?
Typically, if you merely get Social Security benefits, you would not have some taxable income and would not have to file a tax return.
The catch with Social Security benefits is if you’re married but file another tax return from your partner that you lived with throughout the year. Then you’ll always have to add at least a few of your Social Security benefits to your taxable income to find out whether it’s higher than your standard deduction.
Your Social Security Benefits May Be Taxable
When deciding if you have to file a return and get Social Security benefits, you want to consider tax-exempt income since it can make your benefits taxable even if you don’t have some taxable income.
Here’s an example of where you might need to file, despite tax-exempt income:
You’re under age 65 and get $30,000 in Social Security benefits and get an additional $31,000 in tax-exempt interest rates. $14,700 of your Social Security benefits will be regarded as taxable income.
That can be more than a standard deduction ($12,400 for a taxpayer in 2020). You would need to file a tax return.
To Determine whether your Social Security benefits are taxable:
- Add one-half of their Social Security earnings to other income, such as tax-exempt interest.
- Then compare this amount to the base amount for your filing status.
- When the total is greater than the base amount, a number of your benefits may be taxable.
Income thresholds for taxpayers 65 and older are bigger.
If you’re at least 65 years old, then you get an increase in your standard deduction. You can also get a heightened standard deduction if:
- You’re blind
- Or your partner is at least 65
- Or if your partner is blind.
The biggest standard deduction is to get a married couple who is both blind and over 65.
Enjoying a larger standard deduction can permit you to get more income than a person under age 65 and not need to file a return.
When a dependent (Adult or Child) might need to file a tax return
Taxpayers that are considered dependent on your tax return are subject to different IRS filing requirements, irrespective of whether they’re adults or children. A tax return is required if your earned income is higher than your standard deduction.
The standard deduction for single dependents That Are under age 65 and not blind is that the higher of:
$1,100 at 2020
Or the addition of $350 + your earned income up to the standard deduction for the single unclaimed taxpayer that’s $12,400 in 2020.
A dependent’s income could be “unearned” as it comes from sources such as interest and dividends. When a dependent’s unearned income is higher than $1,100 in 2020, the dependent must file a tax return.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law by the president on March 27, 2020, has pushed the deadline for filing federal taxes from April 15 to July 15, 2020. Many states have followed suit, but not all, so be sure to check yours
When You Might Want to File A Tax Return To Claim A Tax Refund
Considering all the above said, there are many years when you may not be required to file a tax return but might want to. In case you’ve got federal taxes withheld from your paycheck, the only way you may be given a tax refund if too much has been withheld is if you file a tax return.
For instance, if you’re a single citizen who earns $2,500 during the year, with $300 payable for national taxation, then you’re eligible for a refund for your whole $300 because you earned significantly less than the standard deduction.
The IRS does not automatically issue refunds with no tax return, so if you would like to claim any tax refund due to you, you need to file one.
In my opinion, even if you’re not required to file, there are a few good reasons why you might want to reconsider:
- To acquire a refund for any taxes withheld from your salary.
- To make the most of the Earned Income Credit (EIC).
- To make the most of some other refundable credits such as the Additional Child Tax Credit or the American Opportunity school credit.
Conclusion
Knowing the IRS’s yearly threshold limitations is the main factor in determining whether you have to file a tax return every year. Most people will have comparable tax cases from year to year, which can help you understand your tax obligations.
Some might experience extreme changes from year to year due to a fall in earnings due to a lost job, marriage, new kids, or possibly increased earnings when going past dependence or higher education.
The IRS provides comprehensive information annually for every situation. So, the important thing is staying current on the requirement related to your circumstance. You need always to keep personal records of your returns for up to six years.
Tax matters are usually unique to individual scenarios. So your experience might be different from mine. Let’s chat about it in the comment section
