Although nearly 200 million Americans file tax returns every year, not everyone has to. But new tax laws and other filing requirements may have changed whether some of these citizens who haven’t had to file before are legally required to file a tax return now. Previously, your age, income level, and filing status (married, single, etc.) determined whether you needed to file a tax return. But now there are more factors involved, including types of income, dependents, health care coverage, and tax refund eligibility. So if you’re wondering “Do I have to file taxes?” here are four situations where you should or legally have to file a tax return.
Earning More Than the Minimum Income Requirement
The IRS doesn’t tax income that is equal to or less than the amount of the standard deduction. Tax-exempt income is not included in this calculation. So if you don’t earn more in annual income than the standard deduction, and you aren't claimed as a dependent by another taxpayer, then you don’t have to file a tax return. As an example, if you’re single, younger than 65, and earn at least $12,000, the total of the tax year 2018 standard deduction for a single taxpayer, you must file a tax return. A free, simple-to-use tax calculator can help determine the need to file a tax return for other individual scenarios. The IRS also lists the minimum income requirement amounts to file a tax return on page 2 of Publication 501.
Dependents Earning Income
No matter whether they’re an adult or a child, those claimed as a dependent by a taxpayer on a separate tax return are held to different IRS filing requirements. Because a dependent cannot claim their own exemption, when their earned income is more than the standard deduction for a single taxpayer, which in tax year 2018 is $12,000, then they are required to file a tax return. But when the dependent’s income is unearned, such as from interest or stock dividends, the minimum income requirement to file drops to above $1,050.
Affordable Care Act (ACA) Subsidies
For a qualifying individual to receive their tax subsidy for purchased health insurance coverage under ACA, they are required to provide their income level. The government verifies this income information via the individual’s federal tax return. Even if you have never filed a tax return before, which may be the case if you didn’t make enough money, you may be required to file one to receive a tax subsidy for health insurance. For more information on ACA and how it can affect your taxes, check out our Ultimate Guide to Health Insurance and Taxes.
Getting Tax Refund
If you’re earning a paycheck and excessive federal taxes are being withheld, you need to file a tax return to get your refund. So let’s say you’re a single taxpayer earning $5,000 annually and $600 is being withheld for federal tax. While you are not legally required to file a tax return because you earned less than the standard deduction ($12,000), you are entitled to a refund of the entire $600. Since the IRS doesn’t issue refunds unless a tax return is filed, if you want your refund, start filing!
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