If You Made Less Than $25,000 in One Year, Do You Have to File Taxes?

by Jeff Franco J.D./M.A./M.B.A. ; Updated September 11, 2015

If you make less than $25,000 in one year, your requirement to file a tax return depends on your particular circumstances. In order to make this determination, you must first know exactly what your annual income is, and the filing status for which you qualify. Additionally, you must reevaluate your obligation to file a return every year, since tax laws frequently change.

IRS Filing Requirements

The general filing guidelines that apply to most taxpayers who are not a dependent or self-employed require you to add up one personal exemption plus your standard deduction. If your annual earnings exceed this sum, then you must file an income tax return. If you are a dependent to another taxpayer, then you don't claim an exemption for yourself and must file a tax return when annual earnings exceed the standard deduction available to a single taxpayer. And if you are self-employed, net earnings of just $400 require the filing of a return.

Filing Status Implications

For purposes of determining whether you must file a return, your filing status is extremely important, since the amount of your standard deduction depends on your filing status. The three most frequently used filing statuses are single, head of household and married filing jointly. In 2011, single filers can claim a standard deduction of $5,800, while head of household filers can claim $8,500. If you are married filing jointly, your standard deduction is the largest, at $11,600. In addition, joint filers are able to claim two exemptions when determining whether they need to file. With two exemptions of $3,700 each, a married couple doesn't need to file a tax return if they earn $19,000 or less. Both the exemption and standard deduction amounts will change, which is why you need to evaluate your filing obligations each year.

Deductions and Exemptions

Just because you must file a return doesn't mean you will always have a tax bill to pay. There are ways to reduce your taxable income other than just a personal exemption and standard deduction. You can also claim an exemption for each of your dependents, and even itemize your deductions instead of claiming the standard deduction when it results in more tax savings. In addition, there are many deductions known as "adjustments to income" that are available to all taxpayers and cover things like student loan interest, IRA contributions and the alimony payments you make. As a result, even if you earn less than $25,000 and have to file a return, it's still possible to end up with zero taxable income.

Claiming a Refund

There are years when you should consider filing a tax return even if your income is less than $25,000 and the IRS doesn't require a return. When you earn income as an employee, you are subject to withholding of federal tax during the year. However, if at the end of the year you conclude that a return isn't necessary, this means that you don't owe any income tax. The only way that you can obtain a refund for all the money that was withheld throughout the year is by submitting a tax return to the IRS.

About the Author

Jeff Franco's professional writing career began in 2010. With expertise in federal taxation, law and accounting, he has published articles in various online publications. Franco holds a Master of Business Administration in accounting and a Master of Science in taxation from Fordham University. He also holds a Juris Doctor from Brooklyn Law School.