Not everyone has to worry about filing an income tax return. The IRS sets income thresholds based on age and filing status that can help you determine whether you need to file. But some exceptions apply to certain types of income, credits, and taxes owed as well as your dependency status. Some situations might warrant filing a tax return even if you're excluded otherwise.
Use this guide to determine your filing requirements and to better understand why you might want to file, even if it's not required for your situation.
Basics of Tax Filing
The IRS includes its rules for who must file a tax return in IRS Publication 501. It explains how a taxpayer's filing status, age, gross income and other factors help determine if they must file a return for the tax year, and it also mentions various exceptions.
The filing statuses include single, qualifying widow/widower, head of household, married filing separately and married filing jointly. The filing status you choose depends on your marital status, dependents and/or living situation at the end of the tax year. Age groups factored in include those under 65 and over 65.
The IRS looks at your gross taxable income when determining whether you need to file taxes. Income subject to taxation includes your wages from jobs and/or self-employment, canceled debt, interest income, unemployment income, gambling winnings, pensions, retirement plan distributions and capital gains. But gross income excludes some other types of income, such as child support payments, a portion of Social Security payments, certain disability benefits, life insurance proceeds and gains from primary home sales (up to a limit).
Read More: Form 1040: What You Need to Know
General Filing Requirements and Thresholds
The general criteria used to assess whether most taxpayers need to file a tax return for the year based on age, filing status and gross income are the IRS standard deduction amounts for tax year 2021. They include the following:
- Single taxpayers: Those younger than 65 need to file when they have a gross income of $12,550. This increases to $14,250 for those who are age 65 and older.
- Qualifying widows and widowers: Taxpayers who've lost their spouse and have not remarried and who have dependents must file a federal return if they have a gross income of $25,100 if they're younger than age 65 and $26,450 if they're older than 65.
- Heads of household: An unmarried taxpayer who supports dependents and pays more than half of their household's expenses must file a tax return if they have a gross income of $18,800 if under 65 and $20,500 if older than 65.
- Married couples filing separately: The minimum gross income for filers in this group is only $5 regardless of age.
- Married couples filing jointly: A married couple must file when they reach a gross income of $25,100 if both spouses are under age 65. This goes up to $27,800 if they're both over age 65, and it's $26,450 when just one spouse is over 65.
These are just guidelines, and these figures apply to your 2021 income only, the tax year for which you'd file a return in 2022. The thresholds shift a little each year based on inflation. And there are some exceptions.
Special Filing Requirements for Social Security
Social Security benefits won't count toward your gross income or trigger a filing requirement if this is your only source of income. But this changes if you receive other types of taxable income such as interest, pensions, job wages or self-employment income. The IRS requires you to add half your Social Security income (plus half of any spouse's) to that other income in this case. Then you would use some different thresholds to determine whether you may have to pay taxes on your benefits.
For unmarried individuals and those who married and filing separately, the threshold to pay taxes on up to half your benefits is $25,000. It's $32,000 for those married filing jointly. You could pay taxes on up to 85 percent with an income over $34,000 for unmarried individuals and those married filing separately and living apart or over $44,000 for married individuals filing jointly. Married people who are living together and filing separately must pay taxes on all their benefits in most cases.
Filing Requirements for Disability Benefits
Whether your income from disability benefits counts as gross income toward the filing requirements depends on the source of the benefits. Use the income tests for Social Security if the disability payments came from Social Security or Railroad Retirement programs and you received another type of income in addition to these benefits.
The money counts and is added to your gross income to determine your filing threshold if you receive disability benefits from an insurance plan to which your employer contributed all or in part.
Filing Requirements for the Self-Employed
The IRS sets a much lower threshold for when you must file a tax return if you freelance or do work as an independent contractor or if you're otherwise a business owner or partner. You must file a return if your net self-employment income was at least $400 regardless of your filing status or age. You can subtract qualified business expenses from your gross earnings for the year to arrive at your net profit or loss. The threshold is based on this number.
Read More: What Are Self-Employed Taxes?
Filing Requirements for Dependents
The IRS has other guidelines for those who are dependents because someone else claims them on their tax return. These rules take earned versus unearned income into account, as well as filing status, age, and whether you're blind.
Earned income includes what you make from work you perform or certain grants and scholarships you receive, while unearned income includes things like Social Security benefits, trust distributions, interest and pensions.
Single Dependents - Not Blind or 65+
You must file if any of these fit your income situation:
- Earned income over $12,550
- Unearned income over $1,100
- Your gross income exceeds whichever of these is higher: $1,100 or the sum of your earned income up to $12,200 plus $350
Single Dependents - Blind and/or 65+
If any of these income limits apply, then you must file:
- Earned income over $14,250 (or $15,950 if you're both blind and 65+)
- Unearned income over $2,800 (or $4,500 if you're both blind and 65+)
- Your gross income exceeds whichever of these is higher:
$2,800 ($4,500 if you're both 65+ and blind) or the sum of your earned income up to $12,200 plus $2,050 ($3,750 if you're both 65+ and blind)
Married Dependents - Not Blind or 65+
You must file a tax return if you have income based on these criteria:
- Earned income over $12,550
- Unearned income over $1,100
- Gross income of $5 or more for married couples who file separately and itemize their deductions
- The larger of $1,100 or your earned income up to $12,200 plus $350
Married Dependents - Blind and/or 65+
You must file if any of these factors apply to your income:
- Earned income over $13,900 ($15,250 if you're both blind and 65+);
- Unearned income over $2,450 ($3,800 if you're both blind and 65+);
- Gross income of $5 or more if you're married and filing separately plus itemizing;
- Your gross income exceeds whichever is higher: $2,450 ($3,800 if you're both 65+ and blind) or the sum of $1,700 ($3,050 if both blind and 65+) and a maximum earned income of $12,200.
Filing Requirements for Nonresident Aliens
The general filing rules apply to U.S. citizens and permanent residents. The IRS lists stricter requirements in Publication 519 for nonresident aliens. You must file a tax return if you're involved in a U.S. business at all, even if the income is otherwise exempt or didn't come from the U.S. You must also file if you'd owe taxes in the U.S. even if you don't earn any income in the country.
There are some exceptions for students, educators and single or qualifying widow(er) taxpayers who don't exceed the filing thresholds based on the standard deduction amounts.
Other Income Tax Filing Exceptions
You may be subject to filing a tax return if you receive certain types of wages or distributions. You must file if you work for a church where your employer doesn't pay Medicare tax or Social Security tax and you made at least $108.28 during the year.
You must also file if your employer didn't withhold the appropriate taxes on tips earned at your job. The same applies if you had distributions from certain types of health and medical spending accounts, as well as retirement accounts for which you might owe taxes.
Read More: Does Welfare Affect Income Taxes?
Filing Requirements for Specific Taxes
You can find yourself in some situations where you have to file even if you otherwise fall in one of the exclusion categories:
- You're subject to recapture taxes.
- You fall under the criteria for the alternative minimum tax.
- You owe household employment taxes
- You have write-in taxes to pay, such as those for Medicare and Social Security.
- You face additional taxes on qualified retirement or health savings plans.
Tax Filing Requirements for Credits
You must file a tax return to benefit from any tax credits for which you're eligible, and filing is a requirement in 2022 if you've received advance Child Tax Credit payments. You must reconcile these payments on your 2021 tax return.
Taxpayers who used the Health Insurance Marketplace to get insurance and who received subsidies must report the information on their tax returns for the Premium Tax Credit and possibly pay back some of the money. The same applies if you received advance payments to help cover expenses for health insurance premiums through the health coverage tax credit.
You must also file to claim the Earned Income Tax Credit, the Adoption Credit, the Saver's Credit, the Child and Dependent Care Credit, various credits for college and tuition expenses and credits for solar energy improvements. The IRS offers an online list of the various credits that individuals can take along with their amounts and qualifications.
Using the IRS Interview Tool
You can take the guesswork out of determining whether you must file a tax return if you use the IRS tool that takes your income and tax information and gives you an answer in less than 15 minutes. Both you and any spouse on the return must be U.S. residents or citizens.
The tool asks about your filing status, the types and amounts of income you received, dependency and disability statuses and the advanced tax credit for health insurance coverage. The IRS makes a recommendation and links you to different resources to learn more about tax rules when you've completed the questionnaire.
Reasons to File Anyway
You can miss out if you don't file a tax return even if you don't qualify for any tax credits and the IRS tool verifies that you don't have to file a tax return. Taxes may have been withheld from your wages or other income during the year. You won't get any of that money back as a tax refund if the withholding was more than you would have owed and you don't file a return.
Keep in mind that states can have their own filing thresholds even if you're excluded from filing a federal tax return. You might still end up having to file at the state level.
- IRS: Do I Need to File a Tax Return?
- IRS: Publication 501, Dependents, Standard Deduction, and Filing Information
- IRS: Self-Employed Individuals Tax Center
- IRS: Publication 519, U.S. Tax Guide for Aliens for Use in Preparing 2020 Returns
- IRS: Credits and Deductions for Individuals
- Acorn: Not Everyone Has to File Taxes, But Here Are 7 Reasons Why It’s Smart to File Anyway
- IRS: Regular & Disability Benefits
- Social Security Administration: Income Taxes And Your Social Security Benefit
Ashley Donohoe has written about business and technology topics since 2010. Having a Master of Business Administration degree, bookkeeping certification and experience running a small business and doing tax returns, she is knowledgeable about the tax issues individuals and businesses face. Other places featuring her business writing include Zacks, JobHero, LoveToKnow, Bizfluent, Chron and Study.com.