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Do I have to file my taxes? Here's how to know and why you may want to even if you don't.
Medora Lee, USA TODAY
Updated 5 min read
Not everyone is required to file taxes, but most Americans must and likely will submit a return.
Of the 176.2 million individuals and married couples who could file a return in 2020, about 144.5 million of them did, according to the nonpartisan Washington think tank the Tax Policy Center.
In special situations, you may have to file regardless of your income. If you have net earnings of at least $400 from self-employment, for example, you’re required to file taxes. If you earn at least that much, you pay self-employment tax.
But even if you’re not required to file a return, you may want to. That way, you can claim tax credits and overpayments that could result in money being returned to you.
Confused? We’ll explain it all so you can stay within the law or even benefit.
To determine if you’re one of the millions who have to file a return, start with three things: Your gross income – total income before taxes and adjustments – and your age and filing status.
Filing status means whether you’re single; married filing jointly or separately; head of household; or a 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:
Single filing status:
◾ $13,850 if younger than 65.
◾ $15,700 if 65 or older.
Married filing jointly:
◾ $27,700 if both spouses are younger than 65.
◾ $29,200 if one spouse is younger than 65 and one is 65 or older.
People with “special situations” may have to file a tax return regardless of income. Some of these situations include:
1. You owe any special taxes, such as:
◾ Alternative minimum tax, which is generally for very high-income taxpayers.
◾ Additional tax on a qualified plan, including an individual retirement account (IRA), or another tax-favored account.
◾ Social Security or Medicare tax on tips you didn't report to your employer, or on wages you received from an employer who didn't withhold these taxes.
◾ Uncollected Social Security, Medicare, or railroad retirement tax on tips you reported to your employer; or on group-term life insurance and additional taxes on health savings accounts.
◾ Household employment taxes.
◾ Recapture taxes, which means paying back the federal government for the benefits of using tax-exempt mortgage bonds for financing.
2. You (or your spouse, if filing jointly) bought health insurance from a state or federal marketplace or received health savings account distributions.
4. You had wages of $108.28 or more from a church or qualified church-controlled organization that’s exempt from employer Social Security and Medicare taxes.
Note: If you can be claimed as a dependent on someone else’s tax return, your tax filing requirements are different.
If you’re still stumped, use the IRS’ interactive tool to help you determine if you need to file a tax return.
Know which statements to include when filing taxes this spring.
Should I file a tax return even if I’m not required to?
If you think you can get money back, yes. Consider filing if any of the following apply:
◾ You had income tax withheld from your paycheck. You can get a refund of that amount.
◾ You overpaid. For example, if you made estimated tax payments or had any of your overpayment for last year applied to this year's estimated tax, you might be due money back.
◾ Earned income tax credit. You may qualify for this refundable credit, meaning even if you do not owe taxes, you can still get a refund. Lower-income workers may be eligible for a credit of $510 to $6,318, depending on income and number of children, but you don't need to have children to be eligible.
◾ Additional child tax credit. If you qualify, you can receive up to $1,600 of the $2,000 child tax credit per child as a refund.
◾ American opportunity credit. If you qualify for this tax credit to help pay for post-high school education expenses, you can get a maximum annual credit of $2,500 per eligible student and 40% or $1,000 could be refunded if you owe no tax.
◾ Premium tax credit. If you qualify, you can get a refund on this credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the health insurance marketplace.
Even if you don't have a refund due, the IRS recommends filing a tax return if you received a 1099-B, which has information about securities or property involved in a transaction handled by a broker, to avoid getting a notice from the agency.
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
