Determining if you need to file taxes can be confusing. We’ll cover how to determine your filing status, who needs to file taxes, and how to file when you’re ready. 

Tax Day cometh. Do I need to file taxes?

It’s a fair question to ask yourself, especially if you’re a dependent, have low income, or receive unearned income. There is a minimum income to file taxes, but those income requirements for filing taxes are also tied to factors such as age, filing status, and sources of pay.

In this post, I’ll walk you through filing requirements by income and filing status, how to file, and what you’ll need to have handy when you’re ready to file taxes. I’ll also share some free or low-cost filing options to help you save money or get help during tax time.

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How Much Money Do You Have to Make to File Taxes?

To answer this question, let’s first break down your filing status, which is the basis for your income tax rate. Your marital standing on the last day of the calendar year determines your classification.

Determine Your IRS Filing Status

The IRS has five filing statuses:

  • Single: Not married or legally separated as outlined in a divorce or maintenance (alimony) decree.
  • Married filing jointly: Married and filing taxes on combined income.
  • Married filing separately: Married, but filing incomes separately.
  • Head of household: Not married, paying more than half of the cost of maintaining a home, and responsible for a qualified dependent for at least six months of the year.
  • Qualifying widow or widower with dependent child: If your spouse died in 2019, you can claim “married filing jointly” on your return. You are a qualifying widow or widower for up to two years after the death of your spouse if you have a dependent child and you have not remarried.

IRS Income Thresholds

As a U.S. citizen or resident alien, your minimum income to file taxes is based on your gross (total taxable) income, filing status, age, and whether you can be claimed as a dependent. The income requirements for filing taxes are as follows:

Single filers must earn a gross income of at least:

  • $12,200 for those under 65
  • $13,850 for those 65 or older

Married filing jointly filers must earn a gross income of at least:

  • $24,400 if both spouses are under 65
  • $25,700 if one spouse is 65 or older
  • $27,000 if both spouses are 65 or older

Married filing separately filers must earn a gross income of at least:

  • $5 at any age

Head of household filers must earn a gross income of at least:

  • $18,350 for those under 65
  • $20,000 for those 65 or older

Qualifying widows or widowers with a dependent child must earn a gross income of at least:

  • $24,400 for those under 65
  • $25,700 for those 65 or older

As you can see, if you are married filing separately, chances are you will have to file unless you made less than $5 in 2019.

It’s also worth noting that if you own a business (excluding partnerships), you must file an income tax return regardless of income or filing status. Partnerships don’t escape tax bills, they just get directed to the individual partners based on personal income received from the business.

In general, you won’t have to file for taxes if you fail to meet the income thresholds per filing status and age. Just be sure to keep accurate records of earned and unearned income.

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Do Dependents Have to File Taxes?

If you’re a dependent (qualifying child or relative) and meet certain income levels, you must file taxes. Unearned income includes money from sources such as alimony, interest, dividends, and unemployment benefits. Earned income is money received as a result of employment. Income requirements for filing taxes vary for married and single dependents.

Single dependents who are either 65 and older or blind must file a return if:

  • Unearned income exceeded $2,750
  • Earned income was more than $13,850
  • Gross income (earned/unearned) was more than the larger of either $2,750 or the earned income portion of your gross (up to $11,850), plus $2,000

Single dependents who are both 65 and older and blind must file a return if:

  • Unearned income exceeded $4,400
  • Earned income was more than $15,500
  • Gross income was more than the larger of $4,400 or the earned income portion of your gross (up to $11,850), plus $3,650

Single dependents who are younger than 65 and not blind must file a return if:

  • Unearned income exceeded $1,100
  • Earned income was more than $12,200
  • Gross income was more than the larger of $1,100 or the earned income portion of your gross (up to $11,850), plus $350

Married dependents who are either 65 and older or blind must file a return if:

  • Gross income was $5 or more and your spouse files separately and itemizes deductions
  • Unearned income exceeded $2,400
  • Earned income was more than $13,500
  • Gross income was more than the larger of either $2,400 or the earned income portion of your gross (up to $11,850), plus $1,650

Married dependents who are both 65 and older and blind must file a return if:

  • Gross income was $5 or more and your spouse files separately and itemizes deductions
  • Unearned income exceeded $3,700
  • Earned income was more than $14,800
  • Gross income was more than the larger of $3,700 or the earned income portion of your gross (up to $11,850), plus $2,950

Married dependents who are younger than 65 and not blind must file a return if:

  • Gross income was $5 or more and your spouse files separately and itemizes deductions
  • Unearned income exceeded $1,100
  • Earned income was more than $12,200
  • Gross income was more than the larger of either $1,100 or the earned income portion of your gross (up to $11,850), plus $350

Here are two important things to remember about having to pay taxes as a dependent:

  • You must be a qualifying child or relative to be a dependent
  • Unless you’re a qualifying child, you can’t be claimed as a dependent if your gross income exceeds $4,200

If you don’t meet these criteria as a dependent, you aren’t required to file a return.

Taxable vs. Non-Taxable Income

Since you may receive income from various sources, it’s understandable to have questions about what’s taxable and what isn’t. IRS Publication 525 provides an in-depth discussion about different types of income, including employee wages, disability pensions, fringe benefits, public assistance, proceeds from life insurance, and more.

Knowing the difference between taxable and non-taxable income is helpful when gathering your information to prepare for tax time.

What You’ll Need in Order to File Taxes

You’ll want to gather all income statements, such as W-2 and 1099 forms. You should also make sure you have paperwork that shows expenses (if you run a business), losses, and charitable contributions if you plan to itemize deductions.

If you received income that was not reported on official forms, you’ll need to have your cash accounting records handy. If you meet the income requirements for filing taxes, you’ll also need to know when and how to file.

When to File

Here are important 2020 tax filing dates:

January 15: Deadline for making estimated 2019 federal tax payments (if applicable).

January 31: Early filing deadline for all taxpayers. This is also the deadline to avoid penalties for individuals who make estimated tax payments but didn’t complete the payment by January 15.

April 15: Deadline for filing and paying all federal and state taxes and requesting a six-month extension to file. Even with an extension, all taxes must be paid by this date to avoid penalties and interest.

October 15: Deadline for filing taxes with an approved extension.

How to File

Depending on your level of comfort, you can file one of four ways:

Where to File

If you’re working with a professional or using tax software, instructions will be provided to you. If you are filing on your own by mail, the IRS provides instructions and a list of addresses by state (as well as for international returns) so you know exactly where to send your forms.

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Top Tax Software Programs and Free IRS Tools

If you decide to use self-directed programs to file your taxes, check out our top picks for tax software. Some of the best tax software programs available are:

These programs come out on top for ease of use, accuracy, and user-friendly interfaces. If you get stuck, you’ll also have the added benefit of being able to reach out to a tax professional for free or a nominal fee.

If you are disabled or a senior citizen, the IRS also offers free tools and assistance for self-guided taxpayers. For instance, Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) are two programs offering free tax preparation assistance. VITA helps taxpayers who make less than $56,000 a year, have a disability, or speak limited English. TCE helps those who are 60 or older.

For those who make $69,000 a year or less, you can use IRS Free File software. If your income exceeds this amount, you can use free, fillable forms, but this option is for people who are adept at doing their own taxes.

Tax laws and required forms change, and it can sometimes be difficult to understand whether or not you are required to file. If you are still unsure, use the Interactive Tax Assistant, a free tool provided by the IRS. Before using the tool, you’ll need to know your filing status, the amount of federal income tax withheld in the previous year, and your gross income.

You can also reach an IRS professional by phone, but be advised that hold times can be long. If you’d rather talk to someone in person, make an appointment at your local Taxpayer Assistance Center or check your local library or volunteer organizations for free tax help.

Final Thoughts on Filing Taxes

The long and short of it is that your filing status, income, and age will determine whether or not you need to file taxes. If you fit the tax bill, file the taxes. If you don’t, you could be subject to the failure-to-file penalty or lose your refund. You could also be hit with wage garnishment or bank account levies, a federal tax lien, and even criminal prosecution if you fail to file repeatedly.

Keep an accurate record of your gross income, have a basic understanding of taxable income, stay organized with tax preparation checklists, and seek advice from the IRS or qualified tax professionals for smooth sailing at tax time in 2020 and beyond. When to File Taxes Pin - picture of calculator, laptop, and 1040 on a desk