Not everyone is required to file a tax return, but most Americans are and probably will.
Of the 176.2 million individuals and married couples who could file taxes in 2020, about 144.5 million of them have filed taxes, according to the nonpartisan Washington Tax Policy think tank. Center. Whether you should file your taxes mainly depends on your income, filing status, and age. In special situations, you may need to file a tax return regardless of your income. For example, if you have net income of at least $400 from self-employment, you must file a tax return.
That said, even if you are not required to file a tax return, you may want to do so to claim tax credits and overpayments that could result in the loss of money. came back to you.
It might sound confusing, but we’re going to explain it all here so you can obey the law or even reap some benefits by doing a little unnecessary work.
Important things:Are you ready to file your taxes? Here’s everything you need to know to file your taxes in 2023.
Who is legally required to file a tax return?
To determine if you’re one of the millions who must file, start with your gross income, which is total income before taxes and adjustments, age, and filing status. Filing status is whether you are single or married filing jointly or separately, head of household or 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 failures:
Single filing status:
- $12,950 if under 65
- $14,700 if age 65 or older
Married filing jointly:
- $25,900 if both spouses are under age 65
- $27,300 if one spouse under age 65 and one age 65 or over
- $28,700 if both spouses are 65 or older
Groom filing separately:
Head of household:
- $19,400 if under 65
- $21,150 if age 65 or older
Eligible widow(ers) with dependent child:
- $25,900 if under 65
- $27,300 if age 65 or older
If you file:Is it better to pay someone to do your taxes or do them yourself? We’ll help you decide.
Stay focused:The 2023 tax season has officially begun: here are the main deadlines to keep in mind
People with “special situations” may have to file a tax return, regardless of their income. Some of these situations include:
1. You owe special taxes, such as:
- The alternative minimum tax, which generally targets taxpayers with very high incomes.
- Additional tax on a qualifying plan, including an individual retirement plan (IRA) or other tax-advantaged account.
- Social Security or Medicare tax on tips you did not report to your employer or wages you received from an employer who did not withhold these taxes.
- Uncollected Social Security, Medicare, or railroad retirement tax on tips you reported to your employer or on group life insurance and additional taxes on health savings accounts .
- Household employment taxes.
- Recovery taxes, which reimburse the federal government for the benefits of using tax-exempt mortgage bonds, were used for the financing.
2. You (or your spouse, if filing jointly) purchased health insurance in a state or federal market or received health savings account distributions.
3. You had a net income of at least $400 from self-employment.
4. You received wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and health insurance contributions.
Note: If you can be considered 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.
Do I have to file a tax return even if I don’t have to?
If you think you can get money back, yes. Consider filing if any of the following apply:
- You had tax deducted from your salary. You can get a refund for this amount.
- You paid too much. For example, if you made estimated tax payments or if any of your overpayments from last year were applied against this year’s estimated tax, you could be reimbursed.
- Earned income tax credit (EITC). You may be eligible for this refundable credit, which means that even if you don’t owe tax, you can still get a refund. Depending on your income and the number of children you have, low-income workers may be eligible for an EITC from $510 to $6,318, but you do not need to have children to be eligible for the EITC. EITC.
- Additional child tax credit. If you qualify, you can receive up to $1,500 of the Child Tax Credit of $2,000 per child as a refund.
- American Opportunity Credit. If you are eligible for this tax credit to help pay for post-secondary 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 don’t. owe no tax.
- Premium tax credit. If you’re eligible, 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 with no refund due, the IRS recommends that you file a tax return if you received a 1099-B, which contains information about the securities or property involved in a broker-handled transaction, to avoid receiving a notice. from the IRS.
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at email@example.com and sign up for our free Daily Money newsletter for personal finance tips and business news Monday through Friday mornings.
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