Who is Required to File a Tax Return?

Written By Janay Lockhart

Filing a tax return is an annual responsibility for many, but not everyone is required to do so. Understanding whether you need to file a return can save you time, stress, and potentially money. Here's a breakdown of who needs to file a tax return in the United States.

1. Income Thresholds

The IRS sets specific income thresholds that determine if you need to file a tax return. These thresholds vary based on your filing status, age, and the type of income you earn. For 2023, here are the general income thresholds:

  • Single Filers: If you are under 65 and earned at least $12,950, you must file a return. If you're 65 or older, the threshold is $14,700.

  • Married Filing Jointly: Couples under 65 must file if their combined income is $25,900 or more. If one spouse is 65 or older, the threshold increases to $27,300, and if both are 65 or older, it's $28,700.

  • Head of Household: If you're under 65, you must file if you earned $19,400 or more. If you're 65 or older, the threshold is $21,150.

  • Married Filing Separately: The threshold for all ages is $5.

  • Qualifying Widow(er) with Dependent Child: If you're under 65, the threshold is $25,900. If you're 65 or older, it's $27,300.

2. Self-Employment Income

If you earned $400 or more from self-employment, you must file a tax return regardless of your total income. This includes freelancers, gig workers, and small business owners. The IRS requires self-employed individuals to pay both income tax and self-employment tax, which covers Social Security and Medicare.

3. Special Circumstances

There are other situations where you may be required to file a tax return, even if your income falls below the standard thresholds:

  • Advance Premium Tax Credit: If you received an advance premium tax credit for health insurance through the Marketplace, you must file a return to reconcile the amount you received with your actual income.

  • Retirement Distributions: If you took distributions from a retirement account (such as an IRA or 401(k)), you may need to file a return, particularly if taxes were not withheld from the distribution.

  • Social Security Benefits: If you receive Social Security benefits and have other substantial income, part of your benefits may be taxable, requiring you to file a return.

  • Taxes Withheld: If federal income tax was withheld from your paycheck or other income, you might want to file a return to claim a refund, even if you don’t meet the filing threshold.

4. Dependents

Dependents who have earned or unearned income may also be required to file a tax return. The filing requirements for dependents are different and are based on their income type and amount. For example, if a dependent child has unearned income (like interest or dividends) over $1,150, they generally need to file a return.

5. Earned Income Tax Credit (EITC)

If you qualify for the Earned Income Tax Credit, you should file a tax return even if you don't meet the standard income thresholds. The EITC can provide a substantial refund, even if you don't owe any taxes.

6. Filing for Other Reasons

Even if you aren't required to file a tax return, there are times when you might want to file anyway:

  • To claim a refund for overpaid taxes.

  • To claim credits like the Child Tax Credit or the American Opportunity Credit.

  • To receive a refund of excess Social Security tax withheld.

Conclusion

Filing a tax return can seem complicated, but knowing whether you are required to file is the first step. If your income is above the thresholds, if you have self-employment income, or if you have special circumstances like receiving advance premium tax credits, it's essential to file your return on time. Even if you’re not required to file, you might still want to consider it to claim potential refunds or credits.

When in doubt, consult with a tax professional who can help you navigate your specific situation and ensure that you're meeting all necessary filing requirements. At Janay Does Taxes, we specialize in making the tax filing process as smooth and stress-free as possible. Whether you're filing as an individual or managing business taxes, our team is here to help you maximize your refund and stay compliant. Let us handle the details so you can focus on what matters most—your financial peace of mind.

Janay Lockhart