Not everyone is required to file taxes, but most Americans are and likely will be.
Of the 176.2 million individuals and married couples eligible to file tax returns in 2020, about 144.5 million of them did, according to the Tax Policy Center, a nonpartisan Washington think tank. Whether you need to file a tax return depends primarily on your income, filing status and age. However, in special situations you may need to file a tax return regardless of your income. For example, if you have net earnings of at least $400 from self-employment, you are required to file a tax return.
Even if you are not required to file a tax return, you may want to claim tax credits and overpayments that could result in the money being returned to you
It might sound confusing, but we’ll break it down here so you can stay within the law or even reap some benefits for doing a little junk work.
Important things:Are you ready to file your tax return? Here’s everything you need to know to file your taxes in 2023.
Who is required by law to file a tax return?
To find out if you’re among the millions who must file a return, start with your gross income, which is your total income before taxes and adjustments, age and filing status. Filing status is if you are single or married, filing jointly or separately, head of household or widow(er).
Depending on your age and filing status, the IRS has minimum income thresholds that determine whether you must file a tax return. Here are the breakdowns:
Status of one submission:
- $12,950 if under 65
- $14,700 if you’re 65 or older
Spouses filing jointly:
- $25,900 if both spouses are under 65
- $27,300 if one spouse under 65 and one 65 or older
- $28,700 if both spouses are over 65
Separate submission of spouses:
The head of the family:
- $19,400 if under 65
- $21,150 if you’re 65 or older
Eligible widow(er) with a dependent child:
- $25,900 if under 65
- $27,300 if you’re 65 or older
If you serve:Is it better to pay someone to do your taxes or do them yourself? We’ll help you decide.
Stay focused:The 2023 tax season has officially begun: Here are the key dates to keep in mind
People in a “special situation” may need to file a tax return regardless of income. Some of these situations:
1. You owe any special taxes, such as:
- Alternative minimum tax, which is generally for taxpayers with very high incomes.
- Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-advantaged account.
- Social Security or Medicare tax on tips you didn’t report to your employer or on wages you received from an employer that didn’t withhold those taxes.
- Uncollected Social Security, Medicare, or railroad retirement tax on tips you reported to your employer, or on group life insurance and additional taxes on health savings accounts.
- Household employment taxes.
- Back taxes were used to finance it, which repays the federal government for the benefits of using tax-exempt mortgage bonds.
2. You (or your spouse, if filing jointly) purchased health insurance in the state or federal marketplace or received a health savings account distribution.
3. You had net self-employment income of at least $400.
4. You had wages of $108.28 or more from a church or a qualified church-controlled organization that is exempt from employer Social Security and Medicare taxes.
Note: if you can be claimed as a dependent on someone else’s tax return, your tax filing requirements are different.
If you’re still on the fence, use the IRS’s interactive tool to help you determine if you need to file a tax return.
Should I file a tax return even though I don’t have to?
If you think you can get your money back, yes. Consider submitting if any of the following apply:
- Income tax was withheld from your paycheck. You can get this amount back.
- You overpaid. For example, if you have made estimated tax payments, or if any of last year’s overpayments have been applied to this year’s estimated tax, you may have to pay back the money.
- The Earned Income Tax Credit (EITC). You may be eligible for this refundable credit, which means that even if you don’t owe taxes, you can still get a refund. Depending on your income and the number of children you have, lower-income workers may qualify for the EITC between $510 and $6,318, but you don’t have to have children to qualify for the EITC.
- Additional tax credit for a child. If you qualify, you can receive up to $1,500 of the $2,000 child rebate per child as a replacement.
- American casual loan. If you qualify for this tax credit to help pay for post-secondary education expenses, you can get a maximum annual credit of $2,500 per eligible student, and 40% or $1,000 can be refunded if you owe no tax.
- Premium Tax Credit. If you qualify, you can get reimbursed for this credit, which helps eligible individuals and families cover their health insurance premiums purchased through the Health Insurance Marketplace.
The IRS recommends that you file a tax return if you received a 1099-B that contains information about securities or property involved in a broker-dealer transaction, even without compensation due, to avoid notice from the IRS.
Medora Lee is a money, markets and personal finance reporter for USA TODAY. You can reach her at [email protected] and sign up for our free Daily Money newsletter with personal finance tips and business news every Monday through Friday morning.
