As a little kid you never think about taxes or filing a tax return. Then you get your first job and make a bit of money. Your first check is smaller than expected because of the taxes. This the first time you understand why people complain about taxes!
Now you have a more regular gig that pays more. You have no choice but to start thinking about filing a tax return. Do you know when you need to file a tax return? How much money can you make before you are required to file a tax return? You think to yourself, is it even worth filing a tax return this year? Well here are the rules for when you need to file a tax return.
If you are an individual and a resident of the United States or a resident of Puerto Rico, whether you must file a return or not depends on three factors:
– Gross Income
– Filing Status
– Age
Gross Income
Gross income includes all of the income you have received over the year in the form of money, goods, property, and services that are not exempt from tax. Some examples of taxable income are; salary, wages, tips, bonuses, and dividends.
If you get a 1099-Misc. and it is over $600 dollars you have to file a tax return.
Also if you are getting social security money you must include the benefits in Gross Income calculations if:
1. You are married, filing a separate return, and you lived with your spouse at any time during 2016
2. Half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly)
Filing Status
Your filing status depends on whether you are single, married, married filing separate, head of household, or a qualifying widow/widower with dependent child.
Your filing status is determined on the last day of the year, December 31. For example, if you got married in July of 2017, then you must file married or married filing separate because at the end of the year you were married. It works the same way for getting a divorce. If in November 2017 you get divorced, you no longer can file married or married filing separate even though you were married for most of year.
Age
Age is determined by what age you are on December 31. The best way to put this is that if you are 24 at the beginning of 2017 but turn 25 during the year, you are 25 for your 2017 tax return. There is one special rule for this. If your birthday falls on January 1st of 2018, and you are turning 65 on January 1st 2018, you can file as 65 years of age on your 2017 take return. The rule only works for age 65, and only if your birthday is on the 1st of the year. This takes effect because once you are 65 or older you may be eligible for additional deductions.
Tax Return Filing Requirements Chart
| If your Filing Status is… | AND at the end of 2016 you were… | THEN file a return if your gross income was at least… |
| Single | Under 65 | $ 10,350 |
| 65 or older | $ 11,900 | |
| Married filing jointly | Under 65 (both spouses) | $ 20,700 |
| 65 or older (one spouse) | $ 21,950 | |
| 65 or older (both spouses) | $ 23,200 | |
| Married filing separately | Any age | $ 4,050 |
| Head of household | Under 65 | $ 13,350 |
| 65 or older | $ 14,900 | |
| Qualifying widow/widower with dependent child | Under 65 | $ 16,650 |
| 65 or older | $ 17,900 |
(This chart shows the income for 2016 requirements)
To read this chart effectively start in the left most column and find your filing status. Then move to the right for the next column, age. After figuring out what age group you fit in follow that row to the next column, income. This is the income threshold for filing a return. If your income is less than the income threshold then you don’t need to file a tax return. If your income is greater than the income threshold then you must file a tax return.
Example 1: You are 24, single and earned $9,000 of income. According to the chart, you are not required to file a tax return because your income is less than $10,350.
Example 2: You are 24, single and earned $15,000 of income. According to the chart, you are required to file a tax return because your income is more than $10,350.
Remember, you are required to file a tax return if you earn more than $600 of self-employed or Form 1099-MISC income.
IRS. “Personal Exemptions and Dependents.” Publication 17 (2016), Your Federal Income Tax. IRS, n.d. Web. 01 June 2017.