How Much Minimum Income Do You Need to File Taxes to the IRS?

How much money you earn to owe taxes

How Much Money Do You Have to Earn to File Taxes?

This is a common question during tax season. The income threshold changes from year to year, but the real question is…

Do I have to file taxes?

Great question! Now is the time to start thinking about your income tax situation. 

Will you be filing an individual return this year? How much do you have to make to file taxes? What other questions should I be asking? 

The IRS has an ever-changing and complex system, and navigating it is not always simple. But it’s vitally important to understand. We’re here to help. 

In this article, we will explain how to understand income, minimum income cutoffs to file taxes, and other reasons a tax return may be required. 

After reading this, you won’t need to ask the question, “How much do you have you make to file taxes?” You’ll know.

Understanding Gross Income

understanding your gross income

Everyone’s goal is to keep as much money as possible. And why not? You earned it! But taxes are a necessary feature of living in a society like the U.S. and we all want to do our part. 

The first step to figuring out the monetary amount associated with your particular “part” in society is to calculate gross income.

Your gross income is defined as the total amount of money or income earned in the previous tax year.

For tax purposes, gross income is everything received that is not exempt from tax. This includes: any income from U.S. sources; money from the sale of the main home (even if some is tax exempt); gains from form 8949 or Schedule D; as well as certain business income.

Income Thresholds

How much do you have to make file taxes? That’s where the thresholds come in. Each year, the government puts out a list of thresholds for determining whether or not someone is required to file income taxes that year.

What is the minimum income for taxes?

It’s a burning question, isn’t it? Well, soon it will be answered. Perhaps even in the following bulleted list. 

These are the 2017-2018 filing season thresholds for members of each filing status:
  • Single and under the age of 65: income required to file taxes is over $10,400
  • Single and over the age of 65: minimum earnings to file taxes is over $11,950
  • Married, filing jointly, and both spouses under the age of 65: the IRS minimum income to file is over $20,800
  • Married, filing jointly, and both spouses are over the age of 65: must report if gross income is over $23, 300
  • Married, filing jointly, and one spouse is over the age of 65 while one spouse is under the age of 65: must report if gross income is over $22,050
  • Married, filing separately, of any age: must report if gross income is over $4,050
  • Head of household under the age of 65: must report if gross income is over $13,400
  • Head of household over the age of 65: must report if gross income is over $14,950
  • A qualifying widow or widower, under the age of 65, with a dependent child: must report if gross income is over $16,750
  • A qualifying widow or widower, over the age of 65, with a dependent child: must report if gross income is over $18,000

If your gross income is above the threshold for your age and filing status, you must file a federal income tax return with the IRS.

Remember, this chart applies only if you’re not being claimed as a dependent on someone else’s tax return. If another person is claiming you as a dependent, the rules are different.

Filing Taxes as a Dependent

When you’re filing taxes as a dependent, the list above doesn’t apply. Different thresholds must be followed.

What's the income threshold to file taxes if you are still a dependent?

Here are the guidelines:
  • Single dependents under the age of 65: must report if unearned income (things like dividends/interest) or earned income (like salary and hourly wages) were more than $6,350
  • Single dependents over 65 OR blind: must report if unearned income was over $2,600 or earned income was over $7,900
  • Single dependents over 65 AND blind: must report if unearned income was over $4,150 or earned income was over $9,450
  • Married dependents, one over 65 and one under 65: must report if unearned income was over $1050, earned income was over $6350, or gross income was a minimum of $5 with a separate return filed for your spouse
  • Married dependents, one over 65 OR blind: must report if unearned income was over $2300, earned income was over $7,600, gross income was a minimum of $5 with a separate return filed for your spouse
  • Married dependents, one over 65 AND blind: must report if unearned income is over $3,550, earned income was over $8,850, or gross income was a minimum of $5 with a separate return filed for your spouse

It should be noted that these are not the rules for married taxpayers. Instead, these are rules for dependents who also happen to be married.

Other Reasons to File a Tax Return

Beyond your income, there may be other reasons to file a tax return this year. Particularly if you’re self-employed.

All taxpayers that are self-employed must file a federal income tax return if their total earnings are over $400, including 1099-MISC-reported non-employee income.

You may owe special tax for these reasons:
  • Recapture (like home buyer’s credit)
  • Alternative minimum (AMT)
  • Write-ins (like uncollected social security, railroad retirement tax, group-term life insurance, health savings taxes, or Medicare)
  • Household employment
  • Tips not reported to the employer
  • Wages from an employer who did not withhold
  • Wages more than $108.28 from a church or church-managed organization that is exempt from payroll taxes
  • Tax-favored accounts (if you received distributions from an HSA, Medicare Advantage MSA, or Archer MSA)
  • Early IRA distribution or excess IRA/MSA contributions
  • Failure to take the minimum required distribution

While you may not be required do an income tax return, you may still chose to do so. One reason might be the credits and tax breaks that are available. You also might qualify for a refund if the government withheld excess money.

Receiving Your Tax Refund

When to receive your refund

Are you ready to start the filing process? Once it’s complete and processed, there are four main ways to receive your refund.

#1
Paper Checks

This is the traditional way to receive a refund. Many taxpayers still prefer this method, even though it is the slowest way to get your tax refund money.

#2
Savings Bonds

Beginning in 2010, the IRS began offering this option. To get your refund this way, you must fill out an extra form at the time of filing. The benefit of this method is a fixed rate interest and inflation interest on top of the total. However, it’s not a lot of money.

#3
Direct Deposits

The most popular way to get your tax refund is direct deposit. This is the fastest way to receive your money. And you’re able to split it among multiple bank accounts, per IRS rules. Similar to direct deposit of your paychecks.

#4
Prepaid Cards

Many tax service companies offer refunds  via a prepaid card. They say this is faster and more convenient, so it appeals to taxpayers. But be wary, as there are bound to be fees. You’ll have ATM withdrawal fees or monthly inactivity fees. These add up. 

How Much Money to File Taxes?

Throughout this article, we’ve shown you how much money to file taxes is needed for different filing statuses. Now you know what the minimum income amount is in order to file a tax return. If you’re ready to get started, Locus Tax can help with your return. All it takes is filling out a simple form. Start today!

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