Not everyone is required to file taxes, but most Americans do and probably will.
Of the 176.2 million individuals and married couples eligible to file a tax return in 2020, about 144.5 million of them did, according to the nonpartisan Washington Tax Policy Center. Whether you’ll need to file your taxes depends mostly on your income, filing status, and age. In special situations, you may have to file a tax return regardless of your income. For example, if you have net earnings of at least $400 from self-employment, you are required to file taxes.
That being said, even if you are not required to file a tax return, you may want to file a claim for tax credits and overpayments that may result in returned to you.
This may sound confusing, but we’ll explain it all here so you can stay compliant with the law or even reap some benefits from a little unnecessary work.
Important things:Are you ready to file your taxes? Here’s everything you need to know to file your taxes in 2023.
Who is required by law to file a tax return?
To determine if you’re one of the millions who must file, start with your gross income, which is your total income before taxes and adjustments for age and filing status. Application status is if you are single or married filing jointly or separately, head of household or widow(er).
Depending on your age and filing status, the IRS has minimum income thresholds that determine whether you must file a tax return. Here are the breakdowns:
One application status:
- $12,950 if under 65
- $14,700 if you’re 65 or older
In marriage, they submit together:
- $25,900 if both spouses are under 65
- $27,300 if one spouse is under 65 and one is 65 or older
- $28,700 if both spouses are 65 or older
In marriage, he submits separately:
Head of household:
- $19,400 if they are under 65
- $21,150 if you’re 65 or older
Qualifying widow(er) with a dependent child:
- $25,900 if under 65
- $27,300 if you’re 65 or older
If you submit:Is it better to pay someone to do your taxes or do it yourself? We’ll help you decide.
Stay focused:The 2023 tax season has officially begun: Here are the key deadlines to keep in mind
People in “special situations” may need to file a tax return, regardless of income. Some of these situations include:
1. You owe special taxes, such as:
- Alternative minimum tax, which is generally for taxpayers with very high incomes.
- Additional tax on a qualified plan, including an individual retirement arrangement (IRA) or other taxable account.
- Social Security or Medicare taxes on tips you didn’t report to your employer or on wages you received from an employer that didn’t withhold these taxes.
- Uncollected Social Security, Medicare, or railroad pension tax on tips you reported to your employer or on group life insurance and additional taxes on health savings accounts.
- Taxes on household employment.
- Rebate taxes were used to finance it, which repays the federal government for the benefits of using tax-exempt mortgage bonds.
2. You (or your spouse, if filing jointly) purchased health insurance in the state or federal marketplace or received distributions to a health savings account.
3. You had net self-employment earnings of at least $400.
4. You had a salary of $108.28 or more from a church or qualified church-controlled organization that is exempt from Social Security and Medicare taxes.
Note: if you can be claimed as a dependent on someone else’s tax return, your tax return filing requirements are different.
If you’re still confused, take the IRS’s interactive tool to help you determine whether you should file a tax return.
Do I need to file a tax return even if I don’t have to?
If you think you can get your money back, yes. Consider applying if any of the following apply:
- You had income tax withheld from your paycheck. You can get a refund of that amount.
- You have overpaid. For example, if you made estimated tax payments or applied more than last year’s overpayment to this year’s estimated tax, you may have to pay back the money.
- Earned Income Tax Credit (EITC). You may qualify for this refundable credit, which means that even if you don’t owe taxes, you can still get a refund. Depending on your income and the number of children you have, lower-income workers may be eligible for the EITC from $510 to $6,318, but you don’t have to have children to be eligible for the EITC.
- Additional tax credit for children. If you qualify, you can get up to $1,500 of the $2,000 Child Tax Credit per child as a refund.
- American Opportunity Credit. If you qualify for this tax credit to pay for post-secondary education, you can receive a maximum annual credit of $2,500 per eligible student and 40% or $1,000 can be refunded if you owe no taxes.
- Premium tax credit. If you qualify, you can get a refund for this loan that helps eligible individuals and families cover the premiums for their health insurance purchased through the Health Insurance Marketplace.
Even without a refund due, the IRS recommends that you file a tax return if you received a 1099-B, which contains information about securities or property involved in a broker-managed transaction, to avoid receiving a notice from the IRS.
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can contact her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.