Income Limits for Filing Tax Returns

by Vicki A. Benge ; Updated September 11, 2015
Income limits required to file a tax return change each year.

The Internal Revenue Service bases earning limits as to whether a U.S. resident must file federal taxes on gross income. Gross income includes capital gains realized from the sale of property, residential or otherwise, services and goods received, unemployment compensation, rental and business income, as well as salary and wages. In other words, both earned and unearned income must be calculated to determine gross income. The income limits may vary from tax year to tax year and differ based on filing status.

For the Majority

For married taxpayers who file separate returns the cutoff limits on gross income are lowest. In 2012, the income limit for individuals in this filing category was $3,800 regardless of age. Married persons filing joint returns, where both were 65 or older at the end of tax year, are generally permitted the highest limit. Income limits for single filers under age 65 fall in between; for 65 or older, the limit increases for single filers.

Less Common Filers

Income limits for a taxpayer deemed a "head of household" as to filing status generally fall between the limits for single taxpayers and persons married filing jointly. Taxpayers who meet the filing status of qualifying widow or widower with a dependent child also are regulated under different gross income limits. The age of the taxpayer is relevant in both instances, with limits being slightly higher for persons 65 or older.

Distinct Guidelines

Individuals who can legally be claimed as a dependent on the tax return of another person fall under different IRS guidelines. The earned income limits average around half of that for a single taxpayer and unearned income limits are much smaller. For example, children and other dependents who had unearned income of more than $950 in 2012 were required to file taxes. Interest earned on passbook savings accounts and certificates of deposit are examples of unearned income under IRS regulations. Additionally, U.S. residents who earn income from self-employment must file taxes if minimal profits are produced ($400 in 2012).

Considerations

U.S. taxpayers who do not surpass the income limits for filing a federal tax return must still file to claim any federal income tax paid. Furthermore, certain taxpayers qualify for tax credits that can produce a refund even though their income level does not exceed the filing limits. The earned income credit is an example of a tax credit that can produce a refund in circumstances where one otherwise would not be due.

Warning

The IRS tax code changes from year to year. Since income limits vary based on individual circumstances, you must remain aware of new and revised regulations in order to meet filing requirements. Professional tax preparers can assist you if you are unsure whether you must file federal taxes. For self-preparers, the income limits, as well as any new regulations, are clearly explained in the instruction booklets with each new tax year.

About the Author

Vicki A Benge began writing professionally in 1984 as a newspaper reporter. A small-business owner since 1999, Benge has worked as a licensed insurance agent and has more than 20 years experience in income tax preparation for businesses and individuals. Her business and finance articles can be found on the websites of "The Arizona Republic," "Houston Chronicle," The Motley Fool, "San Francisco Chronicle," and Zacks, among others.

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