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Filing your return: Do I have to file?

Tax BasicsMaybe, maybe not.

If you're still under your parents' roof, for example, you may be a financial asset to them, helping them to pocket some more of their hard-earned money as they claim you as a dependent. But if you're single, working full-time and don't own a house, unfortunately, you may have to fork over some cash to Uncle Sam.

The first step is to determine if you must file a return. Generally, the IRS expects a return from an individual based upon these three factors:

  • Your filing status.
  • Your age.
  • Your income.

Filing status
There are five basic filing status choices: single, married filing a joint return with your spouse, married but each of you filing a separate return, head of household, or qualifying widow or widower. The single designation also applies to divorced and legally separated taxpayers. There are special filing rules for widows or widowers who support a child.

Whatever filing status fits your situation, remember that you select it based upon your status on Dec. 31 of the tax year. If you were single on Dec. 31 and married on Jan. 1, for filing purposes, the IRS considers you a single taxpayer.

 

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Age
Next, the IRS looks at your age. In most cases, any taxpayer who has income must file a return.

But there are special considerations for children younger than 14 who have investment income.

And individuals age 65 or older at the end of a tax year are allowed to earn more income than younger taxpayers before they have to file.

Income
And speaking of income, we get to the main reason behind our tax system. For filing purposes, the IRS considers your gross income; that is, all income you received in the form of money (both wages and self-employment payments), goods, property and services.

If you make over a certain level of gross income, you will have to file a tax return. Just how much money it takes to reach that filing-amount level is adjusted each year by the IRS. The amounts also depend upon the age and filing status data outlined above.

Basically, married couples filing jointly can earn more money than single filers before they have to filed a tax return.

Because each taxpayer is unique, you may find that your filing situation doesn't fit easily into the standard categories of who has to file. In that case, check out the IRS FAQ page on filing requirements.

Filing when you don't have to
The good news after reading all of this: You only need to file one federal income tax return for the year, regardless of how many jobs you had, how many W-2 forms you received or how many states you lived in during the year.

And even if you don't make enough money for the IRS to demand a return, it sometimes pays to send one in.

This is the case for individuals who may be eligible for certain tax credits that could mean money back from the IRS. The same is true if you had a job, didn't meet the earnings filing threshold, but your employer withheld payroll taxes.

The only way you can get the money, whether from credits or overpaid withholding, is to file a tax return.

 

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Tax Basics
Click on the links below to view the seven-part series of Tax Basics
Part One
Part Two: Filing your return
Part Three
Part Four
Part Five
Part Six
Part Seven

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Tax Basics
Knowing how to file can save you money.
Filling out the W-4 form
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Death and taxes
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