Federal law doesn’t require you to file a tax return if you didn’t earn any money during the previous tax year. This might be the case even if you did earn some money but your earnings were less than the amount of that tax year’s standard deduction.
So why bother filing a tax return if there’s no income left after you subtract the deduction? There are a few reasons you might want to do so, even if you don’t technically have to. For starters, you could be leaving money on the table. Here’s what to consider before deciding not to file a tax return.
Income Thresholds for Federal Taxes
The amount of the standard deduction varies by filing status, and it’s usually adjusted each year to keep up with inflation. Every taxpayer is entitled to subtract the standard deduction from their income, so they’re only taxed on what remains.
Below are the standard deductions for each filing status for tax years 2021 and 2022. You generally have to file a tax return if your income was more than the standard deduction for your filing status unless you’re over the age of 65 or other rules apply (more on that below).
|Filing Status||Tax Year 2021||Tax Year 2022|
|Married filing jointly||$25,100||$25,900|
|Married filing separately||$12,550||$12,950|
|Head of household||$18,800||$19,400|
While the IRS states that the standard deduction for married individuals who file separately is the same as those who are single, this doesn’t necessarily determine whether or not you need to file. That’s because the IRS states that married individuals who file separately each need to file a return if they earn even just $5. This income threshold applies to married couples of all ages.
Taxpayers who are age 65 or older may have a little more leeway because they’re entitled to an extra standard deduction. Below are the standard deductions for tax years 2021 and 2022 for those 65 or older.
|Filing Status||Tax Year 2021||Tax Year 2022|
|Married filing separately if one spouse is age 65 or older||$13,900||$14,350|
|Married filing separately if both spouses are age 65 or older||$15,250||$15,750|
|Married filing jointly if one spouse is age 65 or older||$26,450||$27,300|
|Married filing jointly if both spouses are age 65 or older||$27,800||$28,700|
|Head of household||$20,500||$20,800|
A taxpayer may be able to file as a qualifying widow(er) for two years after the death of their spouse if they have a dependent child. This status has the same threshold as those who are married filing jointly, whether over 65 or not. Some other rules may apply.
What If Someone Else Can Claim You as a Dependent?
Different income thresholds apply if someone else can claim you as a dependent, as well as the type of income—earned or unearned. Your total income might be less than the standard deduction for your filing status. However, you will still need to file a tax return if one of the below situations applies for tax year 2021:
|Filing Status||Unearned Income||Age||Blind|
|Single||$1,100 or more||Under 65||No|
|Single||$2,800 or more||Under 65||Yes|
|Single||$2,800 or more||65+||No|
|Single||$4,500 or more||65+||Yes|
|Married||$1,100 or more||Under 65||No|
|Married||$2,450 or more||Under 65||Yes|
|Married||$2,450 or more||65+||No|
|Married||$3,800 or more||65+||Yes|
For example, let's say you're single, 17 years old, not blind, and your parents claim you as a dependent. You had $1,200 in unearned income last year and no earned income. You need to file a tax return because that's more than the unearned income threshold of $1,100. If all else was the same, but you were blind, you would not have to file because that's less than the income threshold of $2,800 for 2021. (Please note: These numbers may be indexed for inflation each year.)
|Filing Status||Earned Income||Age||Blind|
|Single||$12,550 or more||Under 65||No|
|Single||$14,250 or more||Under 65||Yes|
|Single||$14,250 or more||65+||No|
|Single||$15,950 or more||65+||Yes|
|Married||$12,550 or more||Under 65||No|
|Married||$13,900 or more||Under 65||Yes|
|Married||$13,900 or more||65+||No|
|Married||$15,250 or more||65+||Yes|
For example, let's say you're single, 16 years old, not blind, and your parents claim you as a dependent. You had $13,000 in earned income last year. You would have to file a tax return because that's more than the threshold (which is also the standard deduction) of $12,550 for tax year 2021. If all else was the same, but you were blind, you would not have to file because that's less than the threshold/standard deduction of $14,250 for 2021. (Please note: These numbers may be indexed for inflation each year.)
You must also file a tax return if either your unearned or your earned income exceeds the applicable amount for your circumstances. For example, you would have to file a return if you had $1,101 in unearned income, even though you only had $10,000 in earned income, were single and under 65 last year, and someone claimed you as a dependent. You may also have to file if your gross income is greater than the threshold computed for your circumstances. The $5 rule for married taxpayers filing separate returns still applies, as well. (See “What Counts as Taxable Income?” below to learn more about what qualifies as earned and unearned income.)
The IRS provides an interactive tool on its website that can help you determine if you need to file a tax return. It’s only designed for taxpayers who lived in the U.S. throughout the entire tax year. Your spouse must also have lived in the U.S. if you’re filing a joint return.
Other Filing Requirements
Some individuals must file regardless of whether their earnings exceed the amount of the standard deduction to which they’re entitled. Undocumented immigrants, or “nonresident aliens” as the IRS states on its website, must typically file if they engage in any U.S. trade or business during the tax year.
You must also file if you owe any sort of additional tax, such as:
- The alternative minimum tax
- The “nanny tax” for household employees
- Taxes on tips that you didn’t report to your employer
- Additional tax on any qualified retirement plans or health savings plans you contributed to
You must also file a tax return if you had both self-employment income of a certain amount and wages paid by a church or a qualified church-controlled organization that didn’t have to contribute Social Security or Medicare taxes on your behalf. These amounts are $400 and $108.28, respectively.
You must file if you received distributions from certain health savings or medical savings accounts. You also must file if you claimed the premium tax credit on a previous year’s tax return and the money was issued in advance to your insurer.
This list isn’t all-inclusive. You should check with a tax professional if you received any unusual means of income during the tax year that may require you to file a return.
What Counts as Taxable Income?
All these thresholds and limits are based on earned and/or unearned income. Earned income typically comes from salaries, wages, or self-employment. Unearned income derives from things like interest and investment gains. But some common types of income fall outside these parameters, so “gross” income rules apply. Gross income is your earned and unearned income added together. Unemployment compensation is considered taxable income, as well.
If you received an Economic Impact Payment (EIP) in 2021, affectionately known as a stimulus payment or stimulus check, is not taxable income. It doesn’t contribute to your earned or unearned income thresholds.
Social Security benefits are only taxable if your gross income, tax-exempt interest, and half of your benefits combined exceed $25,000 if you’re single or $32,000 if you’re married and filing a joint return, as of 2021. Married taxpayers who file separate returns may have to pay taxes on that income, as well. You also must report and pay taxes on all your benefits if you lived with your spouse at any time during the tax year.
Why You Might Want to File Even If You Didn’t Have Taxable Income
All these rules apply when you are required to file a tax return, but there are a few good reasons why you might want to file even if you technically don’t have to.
You may be eligible to claim the Recovery Rebate Tax Credit if you or one of your dependents were entitled to a stimulus check but never received it. You’re effectively letting the IRS keep that money unless you file a return to claim this as a tax credit.
The same applies to any other refundable tax credit you might be qualified to claim. You won’t get that money unless you file a tax return to claim it. For example, if you did not receive advance monthly payments of the child tax credit, you may qualify for a lump-sum payment when you claim the child tax credit on your 2021 tax return when you file in 2022, even if you don't normally file a tax return.
And if you had earned income that was less than the standard deduction and paid taxes through your paychecks, you may want to file to get some of that money back.
State Income Taxes
The rules outlined above apply to federal taxes. Most states impose income taxes, as well, and the rules about who has to file can be significantly different. Check with your state’s Department of Taxation for the rules that apply in the state where you live or work.
You won’t have to worry about this, however, if you live or work in Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington state, or Wyoming. These states don’t have an income tax as of 2021. Tennessee used to tax unearned income, but this tax is no longer effective as of 2021. And if you live or work in New Hampshire, you will only be taxed on dividend and interest income.
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