Are You Required to File a Tax Return in 2016?

Income Tax Filing Requirements for Tax Year 2016

The next numbers are as follows
PeopleImages/DigitalVision/Getty Images

Not everyone is required to file a federal tax return, only those whose incomes exceed a certain amount. The Internal Revenue Service publishes three tables of filing requirements: one for independent taxpayers, one for dependents, and a third for other situations when a tax return is required.

Are You Required to File? 

Four things determine whether you must file a tax return and how much you can earn before you have to do so:

According to the IRS, gross income means "all income you receive in the form of money, goods, property, and services that is not exempt from tax." These figures pertain the income you earned in 2016, which you must report when you file your tax return for the year in 2017. 

Filing Requirements by Income

If your income equals or exceeds the amounts shown in the chart below, you'll have to file a tax return. 

These tables are published by the IRS in Publication 17 and Publication 501. They're updated each year. These are the figures for the 2016 tax year. 

Table 1. 2016 Filing Requirements for Independent Taxpayers
 
If your filing status is...And at the end of 2016 you were...Then file a return if your gross income was at least...
Singleunder 65$10,350
65 or older$11,900 
Married filing jointlyunder 65 (both spouses)$20,700
65 or older (one spouse)$21.950 
65 or older (both spouses)$23,200 
Married filing separatelyany age$4,050
Head of householdunder 65$13,350
65 or older$14,900
Qualifying widow(er) with dependent childunder 65$16,650
65 or older$17,900 

 

2016 Filing Requirements for Dependents *

Single dependents who are not age 65 or older or blind must file a return in any of the following circumstances:

  • Unearned income was more than $1,050
  • Earned income was more than $6,300
  • Gross income was more than the larger of $1,050 or on earned income up to $5,950 plus $350

    Single dependents age 65 or older or blind must file a return in any of the following circumstances:

    • Unearned income was more than $2,600, or $4,159 if you are both 65 or older and blind
    • Earned income was more than $7,850, or $9,400 if you are both 65 or older and blind
    • Gross income was more than the larger of $2,600 ($4,150 if both 65 or older and blind) or on earned income up to $5,950 plus $1,900 ($3,450 if both 65 or older and blind)

    Married dependents who are not age 65 or older or blind must file a return in any of the following circumstances:

    • Unearned income was more than $1,050
    • Earned income was more than $6,300
    • Gross income was at least $5 and your spouse files a separate return and itemizes deductions
    • Gross income was more than the larger of $1,050 or on earned income up to $5,950 plus $350

    Married dependents age 65 or older or blind must file a return in any of the following circumstances:

    • Unearned income was more than $2,300, or $3,550 if you are both 65 or older and blind
    • Earned income was more than $7,550, or $8,800 if you are both 65 or older and blind
    • Gross income was at least $5 and your spouse files a separate return and itemizes deductions
    • Gross income was more than the larger of $2,300 ($3,550 if both 65 or older and blind) or on earned income up to $5,950 plus $1,650 ($2,850 if both 65 or older and blind) 

      * Excerpted from IRS Publication 17

      Some Other Situations When You Must File a 2016 Return * 

      You have to file a return if any of these four conditions apply to you in 2016:

      • You owe any special taxes, including the alternative minimum tax or additional tax on a qualified retirement plan such as an individual IRA or other tax-favored account. If you only have to file a return because you owe this additional tax, you can file IRS Form 5329 by itself, however. Other special taxes include Social Security and Medicare on tips you did not report to your employer or on wages you received from an employer who did not withhold these taxes, recapture taxes such as for the first-time homebuyer’s credit, or uncollected social security and Medicare or RRTA tax on tips you reported to your employer or on group-term life insurance and additional taxes on health savings accounts.
      • You (or your spouse, if filing jointly) received HSA, Archer MSA, or Medicare Advantage MSA distributions
      • You had net earnings from self-employment of at least $400.
      • You had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes. 
      • You, your spouse or a dependent were enrolled in coverage through the Healthcare.gov Marketplace under the terms of the Affordable Care Act and any premium tax credit payments were made to you. You'll know if this pertains to you because you'll receive a Form 1095-A detailing the payments. 

      * Excerpted from IRS Publication 17

      So What Do All These Numbers Mean?

      Filing requirement numbers are a taxpayer's standard deduction and personal exemption amounts added together. Here's an example.

      In Table 1, a single person under the age of 65 has a filing requirement of $10,350 for the year 2016. A single person has a standard deduction of $6,300. Table 1 is for independent taxpayers, so this single person is eligible to claim at least one personal exemption for himself, which amounts $4,050 for 2016. When we add $6,300 and $4,050, we come up with $10,350, and that's the same as the filing requirement amount.

      The standard deduction varies based on a taxpayer's filing status, and people who are 65 or older and blind persons get an additional standard deduction on top of their regular standard deduction. The filing requirements differ because of these different standard deduction amounts. The filing requirement figure represents the minimum amount of deductions a person might have based on their tax situation.

      A person's tax liability — what he's required to pay the IRS in federal tax — is based on taxable income, which is his gross income minus any deductions. In other words, no tax is typically due when a person's taxable income is less than the total of his standard deduction and personal exemption. I say "typically" because there are situations in which a person's income might fall below the filing requirement yet he would still have a tax liability. These are the situations described in Table 3.

      The filing requirement numbers change each year because the standard deduction and personal exemption amounts change each year. They're adjusted annually based on changes in inflation.

      When Would It Be a Good Idea to File a Return Even If It's Not Required? 

      You'll want to file a return even if you're not required to if you're going to receive a tax refund or if there's some other benefit. 

      If you had any taxes withheld from your income such as withholding on wages or retirement plan distributions, you overpaid their tax. Your income is below the filing requirement so you do not have a tax liability. You're entitled to a refund of that money, but the IRS will keep it unless you file a tax return. 

      It could also generate a tax refund if you're eligible for one or more refundable tax credits, such as the earned income credit, the child tax credit or the American Opportunity credit. You'd have to file a tax return to calculate these credits and request a refund from the IRS.

      You might also want to file a tax return just want to be on the safe side — you feel uncomfortable not filing one. The IRS has certain time limits for issuing tax refunds, for conducting audits and for collecting taxes it thinks someone might owe. These time limits are called statutes of limitations. In general, the IRS has three years from the date a tax return was filed to begin an audit, and 10 years from the date a tax return was filed to collect the tax. If a return isn't filed, those time limits never begin.This could potentially leave you exposed to audit or collection actions. Filing a return starts the clock ticking on these statutes of limitations.

      You might also want to file a return even if you don't have to if you have been — or might be — a victim of identity theft. Filing a return puts the IRS on notice regarding what your true income was for the year, and it prevents an identity thief from filing a fake tax return using your name and Social Security number.