Not everyone is required to file a tax return, but most Americans are and will likely file a tax return.
Of the 176.2 million individuals and couples who could file a tax return in 2020, about 144.5 million of them filed a tax return, according to the Washington Nonpartisan Tax Policy Center. Whether or not you need to file a tax return depends primarily on your income, tax filing status, and age. However, in special cases, you may have to file a tax return regardless of your income. For example, if you have a net income of at least $400 from self-employment, you must pay taxes.
With that said, even if you’re not required to file a tax return, you may want to file to claim tax credits and overpayments that could result in the money being returned to you.
This may sound confusing, but we’ll explain it all here so you can comply with the law or even reap some of the benefits of doing some unnecessary work.
Important things: Are you ready to pay 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 of people who must file a tax return, start with your gross income, which is your gross income before taxes and adjustments, and your age and tax filing status. Filing 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 to determine if you must file a return. Here are the problems:
Application status:
Joint declaration of marriage:
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$25,900 if both spouses are under 65 years old
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$27,300 if one spouse is under 65 and one is 65 or older
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$28,700 if both spouses are 65 or older
Married separately:
Head of a household:
Eligible widow(er) with dependent children:
If you submit: Is it better to pay someone to do your taxes or do it yourself? We will help you decide.
Concentrate: The 2023 tax season officially begins: Here are the important deadlines to keep in mind
People with “special circumstances” may be required to file a tax return, regardless of income. Some of these situations include:
1. You owe any special taxes, such as:
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Alternative minimum tax, usually for very high income taxpayers.
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Additional taxes on a qualified plan, including an individual retirement arrangement (IRA) or another tax-advantaged account.
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Social Security or Medicare taxes on tips you do not report to your employer or on wages you receive from an employer do not withhold these taxes.
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Uncollected Social Security, Medicare or railroad retirement taxes on tips you reported to your employer or on group life insurance and additional taxes on savings accounts save health.
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Household labor tax.
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Tax recovery, returning to the federal government the benefits of using tax-free mortgage bonds that were used for financing.
2. You (or your spouse, if filing jointly) purchased health insurance from a state or federal market or received health savings account distributions.
3. You have a net income from self-employment of at least $400.
4. You have a salary of $108.28 or more from an eligible church-controlled church or organization that is exempt from employer Social Security and Medicare taxes.
Note: if you can be considered a dependent on someone else’s tax return, your tax return requirements will be different.
If you are still confused, get IRS Interactive Tool to help you determine if you need to file a tax return.
Should I 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:
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You have withheld income tax from your paycheck. You can get that amount refunded.
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You paid too much. For example, if you made estimated tax payments or any of your overpayments for last year are applied to this year’s estimated taxes, you may be able to get a refund on arrival. term.
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Earned Income Tax Credit (EITC). You can qualify for this refundable credit, which means 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 qualify for an EITC between $510 and $6,318, but you don’t need to have children to qualify for an EITC.
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Additional Child Tax Credit. If you qualify, you can get up to $1,500 of the $2,000 Child Tax Credit per child as cashback.
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American Credit Opportunity. If you qualify for this tax credit to help pay for your post-secondary education costs, you can receive a maximum annual credit of $2,500 per eligible student and 40% or $1,000 is refundable if you don’t owe taxes.
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Premium tax credit. If you qualify, you may be able to get this credit back to help eligible individuals and families cover their health insurance premiums purchased through the Health Insurance Marketplace.
Even if your return isn’t due, the IRS recommends filing a tax return if you receive a Form 1099-B, which includes information about securities or assets involved in a broker-processed transaction, to avoid receive notice from the IRS.
Medora Lee is a currency, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] and sign up for our free Money Daily newsletter for personal finance tips and business news Monday through Friday morning. .
This article originally appeared on USA TODAY: Do I need to file a tax return? Who should and shouldn’t apply in 2023
