Only individuals whose incomes exceed certain levels must file tax returns, but income isn’t the only factor involved. Numerous other circumstances can affect the requirement, too, because the thresholds depend on your filing status and associated factors. There also are some situations in which you’d want to file a return even if you’re not required to.
Eligibility for many of the benefits provided for in the American Rescue Plan Act (ARPA), signed into law in March 2021, require filing a tax return. The thresholds for eligibility were temporarily lowered for the 2021 tax year.
The ARPA temporarily eliminated the $2,500 minimum income to be eligible for the Child Tax Credit, and it temporarily expanded the credit to up to $3,600 for children below age 6. These changes only apply to the 2021 tax year, but you didn't have to wait until 2022 to get the benefit. Many families received half of their Child Tax Credit through periodic payments beginning in July 2021. They can claim the other half when they file their 2021 tax returns in 2022.
Factors That Impact Income Thresholds for Taxes
Four factors generally determine whether you must file a tax return, and each circumstance may influence your gross income threshold. The four factors are:
- Whether someone else claims you as a dependent
- Whether you're married or single
- Your age
- Whether you're blind
Some of these factors can overlap, which can change the income thresholds for required filing.
Minimum Gross Income Thresholds for Taxes
The thresholds begin with your gross income—anything you receive in the form of payment that's not tax-exempt. Gross income can include money, services, property, or goods.
The thresholds cited here apply to income earned in 2021, which you report when you file your 2021 tax return in 2022. They're equal to the year’s standard deduction because you would deduct this amount from your gross income and only pay tax on the difference.
For example, you would owe no tax and would not be required to file a 2021 tax return if you’re single and earned up to $12,550 in 2021, because this is the amount of the 2021 standard deduction. Subtracting it would reduce your taxable income to $0. However, you would have to file a tax return if you earned $12,551 because you’d have to pay income tax on that additional dollar of income.
As of the 2021 tax year, the minimum gross income requirements are:
- Single and under age 65: $12,550
- Single and age 65 or older: $14,250
- Married filing jointly and both spouses are under age 65: $25,100
- Married filing jointly and one spouse is age 65 or older: $26,450
- Married filing jointly and both spouses are age 65 or older: $27,800
- Married filing separately at any age: $5
- Head of household and under age 65: $18,800
- Head of household and age 65 or older: $20,500
- Qualifying widow(er) under age 65: $25,100
- Qualifying widower age 65 or older: $26,450
The IRS provides a tool on its website that helps you determine if you have to file a tax return based on your circumstances. It takes about 12 minutes to complete.
Qualifying Rules for Standard Deductions
Various rules and requirements go into determining your filing status.
Head of Household
You must be unmarried on the last day of the tax year, pay more than half the cost of maintaining your home for the year, and have a qualifying dependent to file as head of household.
Widow or Widower
A qualifying widow(er) with a qualifying child dependent is entitled to use the same standard deduction as married taxpayers who file jointly for the two years following the year the spouse died. Other rules also apply.
Over 65 or Blind
Single taxpayers who are 65 or older and blind persons get an additional standard deduction of $1,700 on top of the regular standard deduction. Their filing requirements differ because of these additional amounts. Spouses can add an additional $2,700 if they’re married and they’re both over age 65 or blind, or $1,350 if only one spouse is over age 65 or blind. You get an additional $1,700 if you file as head of household as well, and qualifying widow(er)s get $1,350 under these circumstances.
Married taxpayers who file separate tax returns must both claim the standard deduction. One of them can’t opt to itemize their deductions instead.
Qualifying Rules if You Can Be Claimed as a Dependent
You must file a tax return for 2021 under any of the following circumstances if you're single, someone else can claim you as a dependent, and you're not age 65 or older, or blind:
- Your unearned income was more than $1,100.
- Your earned income was more than $12,550.
- Your gross income was more than $1,100 or $350 plus your earned income up to $12,550, whichever is greater.
Dependents who are students must include taxable scholarships and fellowship grants in their incomes.
Unusual Tax-Filing Situations
If you owe any special taxes, you'll have to file a tax return even if you don't meet these income thresholds. These special taxes include the additional tax on a qualified retirement plan, such as an IRA or other tax-favored account. But if you only have to file a return because you owe a particular tax, you can submit IRS Form 5329 by itself instead.
Other special taxes include the Alternative Minimum Tax, and Social Security and Medicare taxes on tips that you didn't report to your employer.
You must file if you had net earnings from self-employment of at least $400, or if you had wages of $108.28 or more from a church or qualified church-controlled organization that's exempt from employer Social Security and Medicare taxes.
A return is required if you, your spouse, or a dependent were enrolled in coverage through a Marketplace plan, and received premium-tax-credit payments. You'll know whether this pertains to you because you'll receive a Form 1095-A detailing the payments.
Special Rules for Taxpayers Age 65 and Older
Taxpayers who are age 65 or older have different, more generous filing thresholds. You would be considered age 65 for tax purposes if you were born on Jan. 1, 1957. However, the age-65 rule doesn't apply to you if your income for the tax year was $5 or more and you were married but don't file a joint return.
For most people, Social Security benefits don’t count toward your income. However, they will if:
- You lived with your spouse at any time during the tax year and are submitting a married-filing-separate return.
- Half of your Social Security benefits plus your other gross income and tax-exempt interest exceeds $25,000 ($32,000 if married filing jointly.)
Why You Might Want To File a Tax Return Anyway
If your income falls below the minimum income requirements, you might want to file a return if it will earn you a tax refund. This would be the case if you had any taxes withheld from your income, such as withholding on wages or retirement plan distributions, so you overpaid your taxes, because the income falls below these filing thresholds. No tax would be due, and you'd be entitled to a refund of the money that was withheld.
Filing could also generate a tax refund if you're eligible for one or more of the other refundable tax credits, such as the Earned Income Credit. You'd have to file a tax return to calculate and claim the credit, and to request a refund from the IRS.
You might also want to file a return if you have been—or think you might be—a victim of identity theft. Filing a return puts the IRS on notice as to what your true income was for the year, and it prevents a thief from filing a false tax return using your name and Social Security number.
Frequently Asked Questions (FAQs)
When are income taxes due?
Tax Day is usually April 15, but the due date shifts that day falls on a holiday or a weekend.
At what age can you stop filing income taxes?
You must keep filing income tax returns as long as you continue to earn enough income to meet the minimum filing thresholds. Several factors affect your threshold, but your income is still the main factor.
What is the average percentage of income that goes to taxes?
It's difficult to define an "average" U.S. taxpayer because there are so many factors involved in determining filing status, and there are different ways of calculating the taxes that they pay. But the Organisation for Economic Co-operation and Development put the average tax rate after benefits for a single worker at 22.4% in 2020, the last year for which comprehensive statistics are available. This dropped to 7% for the average married worker with two children.