Do I Need to File a Federal Tax Return?

Updated: Dec 1, 2021



You might be wondering if you need to file a tax return. While most people who earn an income must file a Federal income tax return, that is not true for everyone.

Determining Whether to File a Federal Income Tax Return

According to IRS, there are a number of factors that determine whether you need to file a tax return — including your annual income, your age, your marital status, and whether or not you have dependents. It is important to make sure that you are exempt from filing so you don’t mistakenly neglect to submit a tax return to the IRS.

In most cases, you will need to file a return if any of the following are true:

1. Your gross income was over $10,000 as a single filer (or over $20,000 as a married couple filing jointly)

2. You earned over $400 from self-employment 3. You sold your home during the tax year 4. You owe taxes because of your retirement account, either from distributions or excess contributions 5. You owe Social Security and Medicare taxes on tips that were not reported to your employer, or on wages that your employer did not withhold these taxes from.

Let’s Discuss a Little on the 3 Factors that will make you file a tax return as a US citizen or Resident

  1. Gross income:

This includes all income you receive in the form of money, goods, property, and services that is not exempt from tax. It also includes income from sources outside the United States (even if you may exclude all or part of it).

Get more information on Common Types of Income from the IRS.

  1. Filing Status

Your filing status depends on whether you are single or married and on your family situation. Your filing status is determined on the last day of your tax year, which is December 31 for most taxpayers. 3. Age If you are 65 or older at the end of the year, you generally can have a higher amount of gross income than other taxpayers before you must file. You are considered 65 on the day before your 65th birthday. For example, if your 65th birthday is on January 1, 2018, you are considered 65 for 2017.

Filing a Federal Income Tax Return has some Advantages

According to IRS, even if you are not required by law to file a tax return, in some cases it may be in your interest to file one anyway. Most people who are exempt from filing do not owe any taxes. However, they may still be eligible for a tax refund. There are several tax credits and tax deductions that you might qualify for, which can help reduce your tax liability or increase your tax refund. Some of the available tax credits include: Earned Income Credit — This is a refundable credit designed for taxpayers who earn wages, yet fall into a low-income tax bracket. In many cases, people who qualify for this credit can receive a tax refund that is larger than the total amount of taxes withheld from their paychecks.

Child and Dependent Care Credit — If you paid to take care of a child (under the age of 13 and in your custody) or a spouse or adult dependent who is incapable of self-care, you may qualify for this tax credit, which can offset a percentage of the cost of their care.

Education Tax Credits — There are 2 main education tax credits for qualified expenses (such as tuition and enrollment fees) paid by certain taxpayers for themselves, their spouse, or a dependent.

Savers Credit — Some taxpayers may be eligible to claim a tax credit for a portion of the money they contributed to a qualifying retirement account.

On top of the credits available, there is another reason you may want to file a Federal income tax return every year. In certain situations, such as applying for a loan or for government benefits, a copy of your most recent tax return(s) is often required. Most people who earn income (either from wages, self-employment, or dividends) are obligated to file a Federal income tax return every year. Not doing so can result in harsh penalties and interest fees owed to the IRS.

Deciding not to pay federal taxes is risky business. No one wants Uncle Sam knocking at their door, garnishing their wages, or otherwise. If you are not sure whether or not you need to file a return, it’s advisable to consult a tax professional for advice.

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