How Much Do You Have To Make To File Taxes?

Not everyone is obligated to file an income tax return every year. If your total income for the year falls below specific IRS limits, you might not need to file a federal tax return. However, filing a return could still be advantageous. So, what income threshold determines if you need to file taxes? Several factors influence whether you should submit a tax return, and we’ll explore each of them here.

Key Points to Remember

1. Standard Deduction Threshold: If your earnings fall below the Standard Deduction for your filing status, you likely don’t need to file a tax return.
2. Other Income Sources: Even if you don’t reach the filing threshold, you might still need to file if you have additional income types. For instance, if you earn self-employment income or income from interest or dividends, you could be required to file.
3. Social Security Benefits: Generally, if you only receive Social Security benefits, you won’t need to file a tax return.
4. Tax-Exempt Income: If you receive Social Security benefits and also have tax-exempt income, you might need to file. This is because the tax-exempt income could make your Social Security benefits taxable.
5. Dependents’ Income: Dependents who earn income may or may not need to file taxes based on several factors. For example, if their income exceeds the Standard Deduction, they typically need to file a return. Similarly, children with unearned income over $1,250 in 2023, or $1,300 in 2024, usually need to file.

Gross Income Limits

Most taxpayers qualify for the Standard Deduction, which is a fixed amount you can subtract from your income to reduce your taxable income. This deduction is automatically applied, and the amount you’re eligible for depends on your age and filing status. The IRS establishes these amounts before each tax season, and they usually adjust the deduction annually to keep pace with inflation.

The deductions you claim on your tax return influence how much of your income is taxable. If your income is below the Standard Deduction and you don’t have other types of income to report, you generally won’t need to file a tax return. However, income such as self-employment earnings must be reported regardless of the amount.

For the year 2023, you are not required to file a tax return if you meet the following criteria:

• You are under age 65
• You are single
• You do not have special circumstances that mandate filing, such as self-employment income
• Your income is less than $13,850, which is the 2023 Standard Deduction for a single filer

In 2024, this threshold increases to $14,600 due to the updated Standard Deduction amount.

2023 Income Requirements for Tax Filing

For the 2023 tax year, the minimum gross income needed to file a tax return varies based on your filing status and age:

• Single:
  • Under 65: $13,850
  • 65 or older: $15,700
• Head of Household:
  • Under 65: $20,800
  • 65 or older: $22,650
• Married Filing Jointly:
  • Under 65 (both spouses): $27,700
  • 65 or older (one spouse): $29,200
  • 65 or older (both spouses): $30,700
• Married Filing Separately:
  • Any age: $5
• Qualifying Surviving Spouse:
  • Under 65: $27,700
  • 65 or older: $29,200

These thresholds help determine whether you need to file a tax return based on your income and filing status.

Do You Need to File Taxes on Social Security Income?

Generally, if Social Security benefits are your only source of income, you don’t need to file a tax return. The IRS usually does not consider Social Security benefits as taxable income.

However, there are certain scenarios where you might need to report your Social Security income on your tax return. For instance, if you are married and file separate tax returns while living with your spouse, you may need to report your Social Security income. This requirement arises if your Social Security income exceeds the Standard Deduction for your filing status. In such cases, it is considered taxable income, and you will need to file a return.

Another scenario where you might need to file a tax return is if you receive other types of tax-exempt income along with your Social Security benefits. For example, if you earn tax-exempt interest in addition to your Social Security income, and this combination pushes your total income above the threshold for your filing status, you will need to file a return.

Here’s an illustration of when filing might be necessary, even with tax-exempt income:

Imagine you are under age 65, not claimed as a dependent by someone else, and receive $30,000 in Social Security benefits. Additionally, you receive $31,000 in tax-exempt interest. In this situation, $14,700 of your Social Security benefits would be considered taxable income. This happens because the total amount exceeds the Standard Deduction ($13,850 for a single filer in 2023, and $14,600 for 2024). Therefore, you would need to file a tax return.

How to Determine if Your Social Security Benefits Are Taxable

To find out if your Social Security benefits are taxable, follow these steps:

1. Calculate Your Income: Add half of your Social Security benefits to all other income you have, including any tax-exempt interest.
2. Compare with Base Amount: Compare this total to the base amount set for your filing status.
3. Evaluate Taxability: If your total income exceeds the base amount, some of your Social Security benefits may be taxable.

Austin & Larson Tax Resolution can assist you in estimating whether you need to file a tax return and determine which parts of your income might be taxable.

What is the Maximum Standard Deduction Available?

Your Standard Deduction might be higher for various reasons. Here are some factors that can increase your Standard Deduction:

• Age: If you are 65 or older, you receive an increased Standard Deduction.
• Blindness: If you are blind, your Standard Deduction is also increased.
• Spouse’s Status: If your spouse is 65 or older or is blind, you can benefit from an increased Standard Deduction as well.

The highest Standard Deduction is available to a married couple where both spouses are blind and both are over 65 years old.

Having this larger Standard Deduction allows you to have a higher income without needing to file a tax return. This means that even if your income is higher than someone under 65, you might not be required to file due to the increased deduction.

Do Minors Need to File Taxes?

Let’s examine the tax requirements for minors. Regardless of age, if a minor earns a certain amount of income, they must file a tax return.

Earned income refers to money earned from working, such as from a part-time job. For 2023, if a minor earns more than $13,850 from work, they must file taxes. For unearned income, like interest from a savings account, the threshold is $1,250 for 2023.

Dependent status also plays a role. If you claim your child as a dependent and their income surpasses these thresholds, they need to file a tax return. However, if they only have unearned income under $12,500, you can opt to report this income on your tax return instead.

Tax Filing Requirements for Other Dependents

If you list someone as a dependent on your tax return, they must adhere to certain IRS filing rules, whether they are children or adults. They are required to file a tax return if their earned income exceeds their Standard Deduction.

For single dependents under age 65 who are not blind, the Standard Deduction for 2023 is the higher of:

• $1,250 ($1,300 for 2024)
• Or $400 plus their earned income, up to the Standard Deduction amount for a single taxpayer. This threshold is $13,850 in 2023 ($14,600 in 2024).

Unearned income, such as dividends or interest, can also contribute to a dependent’s income. If a dependent’s unearned income exceeds $1,250 in 2023 ($1,300 in 2024), they are obligated to file a tax return.

Should You File Taxes If You Don’t Owe Anything?

You might not always be required to file a tax return, but it can be worthwhile. If you had federal taxes withheld from your paycheck, you might qualify for a tax refund if your income was below the Standard Deduction and too much was withheld. To claim this refund, you must file a tax return.

For example, if you’re a single taxpayer with only $2,500 in earnings and had $300 withheld for federal taxes, you could receive the full $300 back since your income falls below the Standard Deduction.

Remember, the IRS won’t automatically issue refunds if you don’t file a tax return. To claim any refund due, you need to submit a tax return.

Austin & Larson Tax Resolution provides specialized help for taxpayers dealing with back taxes and unfiled returns in Michigan. With their Full-Service option, a local expert tailored to your needs will manage your tax matters from start to finish. Alternatively, if you prefer to file on your own, consult with Austin & Larson Tax Resolution for expert guidance to ensure accuracy and get back on track to a tax-debt-free life.

Conclusion

Understanding whether you need to file taxes can seem overwhelming, but knowing the key factors can simplify the process. The necessity to file depends primarily on your income, filing status, and other financial situations. For many, if your income falls below the standard deduction threshold, you might not need to file a federal return. However, different types of income, such as self-employment earnings or certain benefits, can still necessitate filing.

For instance, even if your income is below the standard deduction, additional income sources like self-employment or tax-exempt interest could require you to file. Social Security benefits generally don’t need to be reported unless combined with other taxable income, which could push your total income above the filing threshold. Moreover, if you’re a dependent with earnings or unearned income that exceeds certain limits, you may need to file a return.

If you’re a minor or a dependent with income that surpasses the required thresholds, filing becomes necessary. Even if you don’t owe any taxes, filing can be advantageous if you had taxes withheld from your paycheck and are due a refund. The IRS does not issue automatic refunds; you must file to claim any overpaid amounts.

Understanding these requirements can be complex, but expert help is available. Austin & Larson Tax Resolution is here to assist Michigan taxpayers dealing with back taxes or unfiled returns. We offer tailored tax solutions and will handle all aspects of your tax matters, from contacting the IRS to managing your correspondence. Our team of IRS Enrolled Agents, CPAs, and Tax Attorneys is dedicated to relieving your tax burden and guiding you to a tax-debt-free life. Contact us today to get started on your path to financial relief.

FAQs

Do I need to file taxes if my income is below the standard deduction for 2024?

For 2024, if your income is below the standard deduction threshold, you generally do not need to file a tax return. However, if you have additional income, such as self-employment or certain other types, you may still need to file.

Are Social Security benefits taxable in 2024?

Social Security benefits are generally not taxable unless you have other income that pushes your total income above the filing threshold. If you receive additional tax-exempt income along with Social Security benefits, some of your benefits may become taxable, requiring you to file a return.

What are the income thresholds for minors to file taxes in 2024?

In 2024, minors must file a tax return if their earned income exceeds $14,600. For unearned income, such as interest, the threshold is $1,300.

Should I file taxes if I don’t owe any money?

Filing taxes can be beneficial even if you don’t owe money, especially if you had taxes withheld from your paycheck. You might be eligible for a refund, and the IRS does not issue refunds automatically. To claim any overpaid amounts, you must file a return.

How can Austin & Larson Tax Resolution assist with tax issues in Michigan? -H3

Austin & Larson Tax Resolution provides expert help for Michigan taxpayers dealing with back taxes or unfiled returns. We offer personalized tax solutions and manage all aspects of your tax matters, including communication with the IRS. Our team is committed to helping you achieve a tax-debt-free life. Contact us to get started on your journey to financial relief.