Do I need to file a tax return?

You may wonder: “Do I have to file taxes this year?” Determining whether or not you need to file a tax return can be complicated. In fact, having an income doesn’t automatically mean you need to file. Read on to learn more about whether or not you need to file a tax return.

“Do I need to file a tax return?”

You may be required to file a tax return depending on your age, income received, and filing status. Here are some common cases where you need to file a tax return:

Scenario 1: You’re an employee

Here’s where it is simple. If you have regular employment – meaning you work for another person or business and receive a W-2 – and no one else can claim you on a federal tax return, you can use this chart to determine whether you need to file a return. Here’s how:

1. Find your filing status and age bracket.
2. If your gross income is below the number on the right, you are not required to file a tax return. If it is more than that number, you do need to file a tax return.

Scenario 2: You’re self-employed

The rules are different if you work for yourself or if you work as a contractor (meaning you get a Form 1099 instead of a W-2). You must file a tax return if your net earnings from self-employment were $400 or more.

Consider this scenario: You may be 36 years old, single and make less than $13,850 per year in regular employment income, but if you have a side business that nets you more than $399, you will need to file a federal tax return.

Scenario 3: You owe the government

Even if you don’t meet any of the income criteria, you may need to file if you owe a special recapture tax to the government. Among other things, that would include:

• Repaying the homebuyer’s tax credit
• Taxes on tips you didn’t report to your employer
• Household employment taxes, such as for a nanny, although you may not need to file a full tax return

“Do I need to file a tax return in special cases?”

Tax-favored accounts

You will need to file a federal return if you received distributions from your Health Savings Account or other medical savings accounts. If you took an early distribution from a qualified retirement plan or made excess contributions, you may also need to file to pay this tax but may not be required to file a full return.

Minister or clergy wages

You will also need to file if you had wages of $108.28 or more from a church or qualified religious organization that is exempt from payroll taxes.

You are a dependent

One of the most complicated issues to sort through when it comes to whether you need to file a return is the issue of dependency. Let’s say you are a college student and receive most of your financial support from your parents. Just because they claim you as a dependent on their tax return doesn’t mean you are automatically off the hook to filing a return.

And if you are single, under age 65, are not blind, and are claimed as a dependent on another taxpayer’s return, you will need to file if:

• Your unearned income (money from dividends or interest) is more than $1,250, or
• Your earned income (like wages) is more than $13,850, or
• Your gross income is more than the larger of:
  • 1) $1,250 or
  • 2) earned income up to $13,450 plus $400.

And if you are married, under age 65, are not blind and are claimed as a dependent on another taxpayer’s return, you will need to file if:

• Your unearned income (money from dividends or interest) is more than $1,250, or
• Your earned income (like wages) is more than $27,700, or
• Your gross income was at least $5 and your spouse files a separate return and itemizes deductions, or
• Your gross income is more than the larger of 1) $1,250 or 2) earned income up to $27,300 plus $400.

The criteria is different if you are blind or over the age of 65.

If you meet any of the above criteria, you will need to file your own federal tax return. If your parents still claim you as a dependent when you file a return, it means you will not be able to claim your personal exemption.                                                        

For 2018 through 2025, the personal exemption is worth $0. The personal exemption reduces your income before taxes are applied. You will also need to take the dependent standard deduction instead of the standard deduction.

Related: Help for determining who can be claimed as a dependent.

“Why do I have to file taxes?”

Federal tax payments provide revenue to state, federal, and local governments and fund essential government services. The major categories include:

• Education
• Medicare
• Social security
• Social services
• Defense and national security
• Transportation and infrastructure
• Science and medical research

In closing

Hopefully this post answers the burning question: “Do I need to file a tax return?” You can check whether you need to file with the IRS or make an appointment with one of H&R Block’s tax professionals.