Do I Have to File a Federal Tax Return?

Most people who work in the U.S. must file a federal income tax return. There are very few exceptions. It’s crucial that you know whether you’re required to file. Otherwise, you may face serious penalties and other legal consequences.

Federal law requires all U.S. citizens and permanent residents to file a federal tax return if their income exceeds the Internal Revenue Service (IRS) thresholds. The government changes the individual income tax filing thresholds each year to account for inflation.

However, just because you must file a tax return doesn’t necessarily mean you’ll have to pay federal income taxes. You may be eligible for deductions or tax credits that reduce the tax you owe to zero.

For example, many low-income taxpayers with children are eligible for the child tax credit, which reduces their tax payments by $2,000 per qualifying child.

Remember, many people who meet the income thresholds receive a tax refund. It all depends on how much you earn, whether you qualify for any exemptions, and whether you can claim deductions and tax credits.

Here, we’ll explain the tax filing requirements and help you determine whether you must file a federal income tax return for the current tax year. We’ll also discuss the benefits of filing taxes and how to take advantage of the IRS’ tax rules.

How Much Do I Have to Earn to File Taxes?

Most people who work must file federal income taxes. (The same is true for state taxes.) However, the IRS requires you to file a tax return if you earn more than the designated threshold for your filing status.

For 2024, the filing thresholds are as follows:

• Single - $14,600
• Head of Household - $21,900
• Married (Filing Jointly) - $29,200 (if both spouses are under the age of 65) and $30,750 (if only one spouse is under 65)
• Qualifying Surviving Spouse - $29,300

The filing thresholds are generally a little higher for people over 65:

• Single - $16,550
• Head of Household - $23,850
• Married (Filing Jointly) - $30,750 (if one spouse is over 65) and $32,300 (if both spouses are over 65)
• Married (Filing Separately) - $5
• Qualifying Surviving Spouse - $30,750

You must file a federal tax return if your adjusted gross income exceeds the above amounts.

What is the Standard Deduction?

When you file your taxes, you must decide whether you'll claim the standard deduction or itemize your taxes. The standard deduction is a flat amount you can deduct from your total gross income. It increases every year and varies depending on your filing status.

The standard deductions for 2024 are as follows:

• Single Filing - $14,600
• Head of Household - $21,900
• Married filing separately - $14,600
• Joint Filing - $29,500

When you itemize your taxes, you can claim multiple qualifying expenses, such as mortgage interest and self-employment health insurance premiums.

When you file your taxes, you’ll choose whichever method saves you the most money. For example, if you don’t own your home, you will probably pay lower taxes by claiming the standard deduction. However, if you own multiple properties and have capital gains/losses, it makes more sense to itemize.

Advantages of Filing

Even if the IRS does not require you to file, it’s still a good idea to file an individual tax return. Your filing information is key for determining your eligibility to claim certain tax benefits available only to filers.

There’s also the chance that you’ll receive a tax refund. One of the most common refund credits is the earned income tax credit (EITC). This is available to people with low to moderate incomes.

Some of the other benefits of filing include:

• Getting money back via a tax refund
• Increasing your Social Security benefits
• Making it easier to secure financial aid to help with education expenses, as you may be required to supply completed tax forms

If you plan on claiming the standard deduction, you can always e-file. This is convenient and quick and may entitle you to the above benefits.

General Tax Filing Requirements

Whether you have to file a return depends on three factors: your gross income, your filing status, and your age. However, there are times when you must file, even if your gross income is below the filing threshold. We’ll discuss these situations below.

Gross Income

The IRS defines gross income as the earned and unearned income an individual receives in the form of money, goods, property, and services that are not tax-exempt. It also includes foreign income earned from sources outside the United States while a person was a nonresident U.S. citizen.

Your taxable income is your gross income plus your unearned income minus any adjustments or deductions. If you are receiving Social Security benefits, you must pay tax on them if you receive substantial income in addition to your benefits.

Filing Status

Your filing status impacts the amount of tax you’ll owe.

There are four filing statuses:

• Single
• Married filing separately
• Married filing jointly
• Head of household

To file as head of household, a taxpayer must meet the following requirements:

• You must be unmarried
• You must pay at least 50% of your household expenses
• You must also have a qualifying dependent

The IRS determines your filing status on the last day of your tax year.

Age

If you’re under 65, you must pay taxes based on the general IRS rules. However, if you are 65 or older at year’s end, you can typically have a higher gross income before you must file.

Who Must Always File?

There are several situations in which an individual must always file a tax return.

According to the tax code, you must file a federal tax return if any of the following are true:

• You have more than $400 in self-employment income
• The law requires you to pay the alternative minimum tax
• You received wages from an employer who did not withhold taxes for Social Security or Medicare
• You had health savings account (HSA) distributions
• You received advance payments of the premium tax credit for enrolling in a health insurance marketplace
• The law requires you to pay additional taxes on qualified retirement plans

It’s a good idea to meet with a tax attorney or accountant if you have questions about your individual income tax return.

Have More Questions? Speak to a Tax Lawyer

If you have questions about whether you are required to file a federal income tax return, a local tax attorney can help. A tax attorney is skilled in tax preparation and can help you answer difficult questions on how IRS rules and tax laws apply to your situation.