Does everyone need to file an income tax return?

Not everyone is required to file an income tax return each year. Generally, if your total income for the year doesn't exceed certain thresholds, then you don't need to file a federal tax return. The amount of income that you can earn before you are required to file a tax return also depends on the type of income, your age and your filing status.

Gross income thresholds

For 2018, all taxpayers are eligible to claim a standard deduction, and if not the dependent of another taxpayer. The standard tax deduction amounts are fixed by the government before the tax filing season and generally increase for inflation each year.

Your income that is equal to or less than the standard deduction is not taxable, the IRS doesn't require you to file a return in years your income doesn't exceed that sum. When determining whether you need to file a return, you don't include tax-exempt income. In 2018 for example, if you are under age 65 and single, you must file a tax return if you earn $12,000 or more, which is the 2018 standard deduction for a single taxpayer.

Income thresholds for taxpayers 65 and older

If you are at least 65 years old and receive Social Security income during the year, you are subject to the same filing requirements as any other taxpayer. However, you can generally receive more income during the year than other taxpayers before having to file a tax return. An exception is if you are married but file a separate tax return from your spouse who you lived with during the year. In this case, you must include your Social Security income when evaluating whether your gross income exceeds the standard deduction plus one exemption. In addition, if the IRS requires you to pay tax on a portion of your Social Security income because your other income is too high, then you must include that taxable portion in your calculation as well, regardless of your filing or marital status.

Dependent tax filings

All taxpayers who are claimed as a dependent on someone's tax return are subject to different IRS filing requirements, regardless of whether they are children or adults. A tax return is necessary when their earned income is more than their standard deduction. However, the threshold decreases to income greater of $1,050 or the sum of $350 and the person's earned income. A dependent's income is unearned, when it comes form sources such as dividends and interest.

Claiming tax refunds

There are years when you are not required to file a tax return but may want to. If you have federal taxes withheld from your paycheck, the only way you can receive a refund when excessive amounts are withheld is if you file a tax return. For example, if you are a single taxpayer who earns $2,500 during the year, with $300 withheld for federal tax, then you are entitled to a refund for the entire $300 since you earned less than the standard deduction plus one exemption. The IRS does not automatically issue refunds without a tax return being filed.

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