Filing Requirements

Not everyone must file a tax return, but some of those people should. If withheld taxes or estimated payments exceed tax liability, then you must file to get a refund or to apply excess payments to the next tax year. People who can receive a payment from the government because of one or more refundable tax credits should also file. Refundable credits include the earned income credit, additional child tax credit, the refundable portion of the American opportunity educational credit, health insurance premium tax credit, and the credit for federal tax on fuels.

Filing Requirements Based on Income

Most people must file a tax return because the requirement kicks in when income reaches a very low level — too low for most people to live on. This is because the government needs to collect money from as many people as possible, so anyone who earns what Congress decided was enough, even though few people can live on such low incomes, must file a return and pay taxes.

The filing requirement income thresholds = the personal exemption + the basic standard deduction, and, if applicable, the additional standard deduction, although there are exceptions. (Note: the personal exemption = 0 until 2026 unless the current law is changed.) For instance, spouses filing separately must report income if it exceeds their personal exemption. If you are eligible for more than 1 filing status, then it makes sense to choose the filing status yielding the lowest tax.

Filing Requirements for Dependents

There are also special filing requirements for dependents, depending on the taxpayer. The main differences from the regular requirements are that the income thresholds depend on whether the income is earned from work or unearned, which the IRS defines as income not earned from work, which applies to investment income, and whether the taxpayer is blind. Part of the reason for distinguishing between earned and unearned income is to determine whether the kiddie tax applies. This section will not apply to you if your unearned income ≤ $1300 and earned income + unearned income is less than the applicable standard deduction minus $450.These limits are a bit higher if you or your spouse are aged 65+ or you or your spouse are blind.

More information: About Publication 501, Dependents, Standard Deduction, and Filing Information | Internal Revenue Service

Filing Requirements Based on Tax Liability or the Need to Report Information to the Federal Government

There are a few special situations where you may also have to file a return, regardless of income:

• liability for special taxes:
  • alternative minimum tax
  • additional tax on a qualified plan, such as an IRA (if this is the only tax that must be paid, then Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts can be filed by itself)
  • employment taxes on tips not reported to the employer
  • write-in taxes, such as employment taxes on reported tips
  • household employment taxes (if these are the only taxes owed, you can elect to file Schedule H, Household Employment Taxes (Form 1040)
• you or your spouse received a distribution from a health savings account
• net earnings from self-employment ≥ $400
• earned wages ≥ $108.28 from a church organization that is exempt from employer Social Security and Medicare taxes
• advance payments of the premium tax credit for health insurance was received by you, your spouse, or your dependent for coverage through the Health Insurance Marketplace, in which case Form 1095-A, Health Insurance Marketplace Statement will be received.

When Filing is Desirable, but Not Required

Sometimes, you may wish to file a tax return even if it is not required:

• You want to claim a tax refund, which most often happens because withheld taxes exceeded your tax liability or because you want to claim tax credits.
• The 3-year statute of limitations for an IRS audit starts tolling when you file a return; if you don't file a return, then the IRS can audit that year indefinitely.
• If you had any capital losses from previous tax years, then you must file a return to continue carrying those losses forward.
• Likewise, if you have net operating losses (NOL) from a business that you wish to carry forward to future tax years to offset future income, or you wish to carry back a NOL to the 2 previous years.

Tax Brackets

Below is a table listing the upper limits for the taxable income brackets, which applies to income after subtracting the standard deduction or itemized deductions. Each bracket span starts at the upper income limit for the lower bracket and ends at the specified amount for that bracket. So, for instance, for 2024, the 10% bracket applies to an income range from 0 to $11,600, while the 12% bracket applies to this income range: $11,600 < Income ≤ $47,150.

The Republican tax policy passed at the end of 2017, the Tax Cuts and Jobs Act, has changed the tax brackets for 2018 and afterwards. Most of the benefits in the change to tax brackets go to those who earn more than $200,000. The marriage penalty has also been eliminated for all tax brackets, except the top 2.

The table below lists the upper limits for the income tax brackets. Remember, these income limits are based on taxable income, not gross income.

• HOH = Head of Household
• MFJ = Marriage Filing Jointly
  • Married Filing Separately = 1/2 of Joint Rate
• QSS = Qualifying Surviving Spouse
• MP = Marriage Penalty
  • The marriage penalty is a multiple of the single bracket, so a value of 2 means no penalty, while a value of 1 is the maximum penalty.

Note that the tax bracket for Married Filing Separately is always 1/2 of the MFJ bracket. Only the top 2 brackets have a marriage penalty since the Married Filing Separately bracket is the same as the single bracket and MFJ is twice that amount. However, at higher brackets, there is a marriage penalty because the higher brackets start at lower income levels for married people than what would be implied by the corresponding Single bracket. In fact, the 33% and 35% tax brackets start at the same income levels for both Single and MFJ statuses. The top bracket also has a substantial marriage penalty, but it is a little better than a complete penalty. The irony here is that a couple in the 33% bracket suffers a higher penalty than a couple in the 35% bracket.

Amended Tax Returns

If an already filed tax return has an error, then an amended return can be filed, on Form 1040X, Amended U.S. Individual Income Tax Return, which is used regardless of which version of Form 1040 was filed. The filing deadline is the later of 3 years after the tax return was filed or within 2 years after the date the taxes were paid. There is no electronic filing option, only a paper filing, and a separate Form 1040X must be filed for different tax years. Additionally, documentation should be provided to explain the reason for the amendment and also any additional documents that would normally be required. Amended returns are scrutinized more closely, incurring a higher audit risk. Therefore, if the error is not serious, then it may be better to not file an amended return. If there is simply a math error, then the IRS will either bill you for a shortfall or refund an overpayment.