Filing a federal income tax return is an annual ritual for millions of Americans. However, not everyone is required to file a tax return with the IRS each year. If your gross income falls below a certain threshold based on your filing status and age, you may not have to submit a return.
Understanding IRS guidelines around income limits for filing can help you determine if you qualify to skip filing taxes. This article provides a detailed overview of federal income tax filing requirements and thresholds for the 2023 tax year.
Who Must File a Tax Return?
According to the IRS, you must file a federal income tax return if your gross income meets or exceeds certain thresholds for your filing status and age. Here are the minimum gross income amounts that trigger the requirement to file a 2023 tax return:
Single Filing Status
- Under 65 years: $13,850
- 65 years or older: $15,700
Married Filing Jointly
- Both spouses under 65 years: $27,700
- One spouse under 65, one 65 or older: $29,200
- Both spouses 65 years or older: $30,700
Married Filing Separately
- All ages: $5
Head of Household
- Under 65 years: $20,800
- 65 years or older: $22,650
Qualifying Widow(er)
- Under 65 years: $27,700
- 65 years or older: $29,200
These thresholds apply to U.S. citizens and resident aliens. Nonresident aliens may have different filing requirements.
Special Rules and Exceptions
Beyond the basic income limits, the IRS has special rules and exceptions that can also trigger the requirement to file a tax return. Even if you made less than the filing thresholds for your status and age, you generally must file a federal return if:
- You had net earnings from self-employment of at least $400
- You received taxable distributions from IRAs or pensions over $10
- You owe alternative minimum tax (AMT)
- You owe household employment taxes for domestic employees
- You owe recapture taxes, such as on education savings accounts or first-time homebuyer credits
Taxpayers claimed as dependents also have distinct filing thresholds based on their earned and unearned income.
Those who receive Social Security benefits may have to file if they have other substantial income that causes a portion of benefits to become taxable.
Benefits of Filing Even If Not Required
Even if you determine your income falls below the minimum thresholds for submitting a tax return, there can still be compelling reasons to file voluntarily. Some key benefits include:
- Claiming a refund of excess taxes withheld from your paycheck or other income
- Qualifying for refundable tax credits like the Earned Income Tax Credit (EITC)
- Reporting your income to more easily qualify for loans/financing
- Building your Social Security credits for future benefits
How Different Types of Income Are Taxed
When assessing whether you meet filing requirements, it helps to understand how the IRS categorizes income. The two main types are:
Earned Income
This includes wages, salaries, bonuses, tips, and net earnings from self-employment. Earned income is taxed at standard rates after you deduct allowable expenses.
Unearned Income
This includes investment income like dividends, interest, and capital gains. Retirement plan distributions, unemployment benefits, alimony, and taxable Social Security benefits also fall under unearned income. Much unearned income is taxed at special rates or may be partly tax-exempt.
Common Tax Filing Questions
Can I be claimed as a dependent but still have to file my own return?
Yes. Dependents have special income thresholds that can require filing a personal return regardless of being claimed.
My only income is from Social Security. Do I need to file?
Generally no. But if you have substantial other income, a portion of benefits may be taxable, requiring a return.
I missed the April deadline. Can I still file a late return?
Yes. You can file late returns even beyond the October extended deadline. But penalties may apply if you owe taxes.
If I won’t get a refund, do I still need to file?
Potentially. Even with no refund expected, income over the thresholds means you must file to avoid penalties for failure to file.
Consequences of Not Filing When Required
Simply assuming your income falls below filing requirements can be risky. The IRS can file a substitute return on your behalf with potential penalties if you skip filing without meeting exclusion rules. Consequences can include:
- Owing the taxes you didn’t pay plus interest and penalties
- Jeopardizing eligibility for certain tax credits
- Facing more tax audits and scrutiny in the future
Filing properly avoids these and demonstrates full compliance even if you owe $0.
Use Free File Services If Eligible
Meeting income thresholds to skip filing taxes doesn’t automatically mean you should prepare a return yourself. The IRS Free File program offers guided tax preparation and e-filing at no cost if your adjusted gross income was $73,000 or less.
Free brand-name software helps maximize deductions and identify tax credits while eliminating preparation fees. Even non-filers can use Free File to claim refunds.
Check Your Status Annually
IRS requirements frequently change from year to year. What allowed you to avoid submitting a return this past tax season may not apply in the future.
Use the IRS tool annually to confirm you still meet exclusion rules based on any income fluctuations or life changes. This ensures you don’t miss filing when required.
Understanding exactly how much you can make before needing to file a federal tax return prevents getting hit with penalties. Paying attention to how IRS rules apply to your situation provides confidence that your approach aligns with Uncle Sam’s guidelines.