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.
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Key Takeaways
• If your income is less than your standard deduction, you generally don’t need to file a return (provided you don't have a type of income that requires you to file a return for other reasons, such as self-employment income).
• In most cases, if you only receive Social Security benefits, you won’t need to file a tax return.
• If you receive Social Security benefits and also receive tax-exempt income, the tax-exempt income may cause your Social Security benefits to be taxable.
• Taxpayers who are claimed as a dependent on someone's tax return must file a tax return when their earned income is more than their standard deduction, or, for certain children, when their unearned income is greater than $1,250 in 2023.
Consider your gross income thresholds
Most taxpayers are eligible to take the standard deduction. The standard tax deduction amountsthat you're eligible for are primarily determined by your age and filing status. These amounts are set by the government before the tax filing season and generally increase for inflation each year.
The standard deduction, along with other available deductions, reduces your income to determine how much of your income is taxable. As long as you don't have a type of income that requires you to file a return for other reasons, like self-employment income, generally you don't need to file a return as long as your income is less than your standard deduction.
For example, in 2023, you don't need to file a tax return if all of the following are true for you:
- Under age 65
- Single
- Don't have any special circ*mstances that require you to file (like self-employment income)
- Earn less than $13,850 (which is the 2023 standard deduction for a single taxpayer)
What if I only receive Social Security benefits?
In most cases, if you only receive Social Security benefits you wouldn't have any taxable income and wouldn't need to file a tax return.
One catch with Social Security benefits is if you are married butfile a separate tax return from your spouse who you lived with during the year. Then you will always have to include at least some of your Social Security benefits in your taxable income to see if it is greater than your standard deduction. If your taxable income is greater than you standard deduction, you would need to file a return.
When Social Security benefits may be taxable
When determining whether you need to file a return and you receive Social Security benefits, you need to consider tax-exempt income because it can cause your benefits to be taxable even if you don't have any other taxable income.
Here's an example of where you may need to file, even with tax-exempt income:
- You are under age 65 and receive $30,000 in Social Security benefits, but also receive another $31,000 in tax-exempt interest. $14,700 of your Social Security benefits will be considered taxable income.
- This is greater than your standard deduction ($13,850 for a single taxpayer in 2023) and you would need to file a tax return.
To figure out if your Social Security benefits are taxable:
- Add one-half of the Social Security income to all other income, including tax-exempt interest.
- Then compare that amount to the base amount for your filing status.
- If the total is more than the base amount, some of your benefits may be taxable.
TurboTaxcan help you estimate if you'll need to file a tax return and what income will be taxable.
TurboTax Tip: If you have had federal taxes withheld from your paycheck, you might want to file a return even when you are not required to, so you can receive your tax refund.
Income thresholds for taxpayers 65 and older are higher
If you are at least 65 years old, you get an increase in your standard deduction. You also get an increased standard deduction if:
- You are blind
- Or your spouse is also at least 65
- Or if your spouse is blind
The largest standard deduction would be for a married couple that are both blind and both over 65 years old.
Having a larger standard deduction can allow you to have more income than someone under age 65 and still not have to file a return. TurboTaxcan help you estimate if you'll need to file a tax return and what income will be taxable.
When a dependent (child or adult) may need to file a tax return
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.
The standard deduction for single dependents who are under age 65 and not blind is the greater of:
- $1,250 in 2023
- Or the sum of $400 + the person's earned income, up to the standard deduction for an unclaimed single taxpayer which is $13,850 in 2023.
A dependent's income can be "unearned" when it comes from sources such as dividends and interest. When a dependent's unearned income is greater than $1,250 in 2023, the dependent must file a tax return.
When you may want to submit a tax return to claim a tax refund
With all the above being said, there are years when you might not be 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 tax refund when too much was withheld is if you file a tax return.
- For example, if you are a single taxpayer whos only income is earnings of $2,500 from a job, 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.
- The IRS doesn't automatically issue refunds without a tax return. So if you want to claim a tax refund then you should file a tax return.
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As an expert in taxation and personal finance, my knowledge is derived from years of professional experience, extensive study of tax laws and regulations, and a commitment to staying updated with the latest changes in the field. I've worked closely with individuals and organizations, offering advice on tax planning, deductions, credits, and compliance with federal tax requirements.
The article you've shared covers several crucial concepts related to income tax filing requirements in the United States. Let's break down the key points:
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Income Thresholds and Filing Requirements: The need to file a federal tax return is determined by various factors, including total income, filing status, age, and type of income. If your income falls below certain thresholds, you may not be required to file a tax return. These thresholds often change yearly and are affected by factors such as standard deductions.
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Standard Deduction: The standard deduction is a fixed dollar amount that reduces your taxable income. It varies based on your filing status, age, and whether you're blind. If your income is less than the standard deduction for your filing status, you may not need to file a tax return, provided you don't have specific types of income requiring you to file.
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Social Security Benefits and Taxation: Generally, if you only receive Social Security benefits, you might not have taxable income that requires filing a return. However, certain circ*mstances, such as filing separately from your spouse, can impact the taxation of Social Security benefits.
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Taxable Social Security Benefits: Tax-exempt income, when combined with Social Security benefits, can result in a portion of those benefits becoming taxable. Calculations involve adding half of the Social Security income to all other income, including tax-exempt interest, to determine the taxable portion.
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Special Considerations for Individuals Over 65 or Blind: Those who are 65 years or older or blind often qualify for a higher standard deduction, allowing more income before needing to file a tax return.
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Dependent Filing Requirements: Dependents claimed on someone else's tax return, regardless of age, might need to file if their earned income exceeds a certain threshold or if their unearned income surpasses specific limits.
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Claiming a Tax Refund: Even if you're not required to file a tax return, it might be beneficial to do so, especially if federal taxes were withheld from your earnings. Filing allows you to claim a refund for overpaid taxes.
The article emphasizes the importance of understanding individual circ*mstances, considering various income sources, and staying informed about deductions and filing requirements. It also recommends using tools like TurboTax to estimate tax liability, claim refunds, and ensure accuracy in the filing process.
For personalized assistance or in-depth guidance tailored to your specific situation, professional tax advisors or tax software services like TurboTax can provide invaluable support.
