How to Tell if you Need To File A Tax Return

Do I Even Need to File a Return in 2017?

You may have worked a little this year, and didn't make much. Did you know that you might not even have to file your taxes?

The Gross Income Threshold generally determines whether a taxpayer has to file a return. Your Gross Income Threshold depends on a couple of things: mostly your age at the end of the tax year and your filing status.

Check out the table below to see where you are!

Other Situations Where You Have to File, Even If Your Gross Income is Below the Threshold:

  • Special taxes are owed, or certain credits must be recaptured.
  • Net earnings from self employment are at least $400.  Sorry, freelancers- this includes 1099/contractor income. See also: Taxes for Freelancers
  • Wages are $102.28 or more from a church or qualified church-controlled organization that is exempt from paying employer social security and Medicare taxes
  • You're someone's dependent. There are different rules for whether a dependent must file a return.

Situations Where you Don't Have to File but You Might Want to File Anyways

If you worked a job which took taxes out of your paycheck, you might want to file anyways. When a job takes taxes from your paycheck, those aren't your real taxes. Those are called withholdings, and they are a guess of what your taxes will be. At the end of the year, you square up with the IRS. If you overpaid, you get the money back in the form of a check from the US treasury!

This is what tax refunds are made of!

But you can't get a refund if you don't file.

On top of literally getting your own money back, you might be eligible for a little extra. If you worked but earned less than the filing limit, there's a strong possibility that you are eligible for the Earned Income Tax Credit. This means that not only do you not owe any federal income tax, but the federal government will give you free money for filing.

That's like paying negative taxes!

 Did you know that 25% of people who are eligible for the Earned Income Tax Credit don't take it?

Related Reading: The Earned Income Tax Credit: A "Tax Loophole" for the Working Poor

Even if you aren't necessarily getting money back, you might want to file anyways as an identity theft precaution. Filing with the IRS may stop someone else from filing with your name and social security number, making up amounts and trying to conjure up a refund in your name.

Also, you might want to file to start the clock on the IRS's statue of limitations. Statutes of Limitations start when the return was filed. Did you know that the IRS can choose to audit you at any point in the future if the return wasn't filed, but they only have 3 years date you file to audit you?

Got a Bunch of Money in Foreign Bank Accounts?

If you have more than $10,000 in one or more foreign bank accounts, you sitll have to file your FBAR. The FBAR is a form letting the US government know that you have money in foreign bank accounts. The FBAR filing requirement isn't really part of filing taxes, so it doesn't go away even if you aren't required to file.

Learn more about taxes! Read about:

Withholdings and Tax Refunds
Taxes for Freelancers

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