Individuals whose incomes exceed certain levels must file tax returns. You'll most likely be required to file a tax return if your income is greater than the standard deduction for the tax year. Single individuals who make more than the $12,950 standard deduction would generally be required to file a return and be eligible to pay taxes for tax year 2022.
But income isn’t the only factor involved. Numerous other circumstances can affect the requirement, too, because the income thresholds depend on both your filing status and other associated factors. You would qualify to pay taxes if you're married and filing a joint tax return with your spouse and you earn more than $25,900. There also are some situations in which you’d want to file a return even if you’re not required to do so.
- You must file taxes if your annual income exceeds the threshold set by the IRS
- Eligibility and rules to file tax returns depend on your income, your filing status, your dependency status, your age and whether you are blind.
- For 2022, individuals making more than $12,950 and married couples filing jointly earning more than $25,900 are required to file taxes.
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 2022, which you report when you file your 2022 tax return in 2023. 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.
You would owe no tax and would not be required to file a tax return if you’re single and earned up to $12,950 in 2022 because this is the amount of the 2022 standard deduction. Subtracting it would reduce your taxable income to $0. However, you would have to file a tax return if you earned $12,951 because you’d have to pay income tax on that additional dollar of income.
As of the 2022 tax year, the minimum gross income requirements are:
- Single and under age 65: $12,950
- Single and age 65 or older: $14,700
- Married filing jointly and both spouses are under age 65: $25,900
- Married filing jointly and one spouse is age 65 or older: $27,300
- Married filing jointly and both spouses are age 65 or older: $28,700
- Married filing separately at any age: $12,950
- Head of household and under age 65: $19,400
- Head of household and age 65 or older: $20,800
- Qualifying widow(er) under age 65: $25,900
- Qualifying widower age 65 or older: $27,300
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
Taxpayers who are 65 or older and blind persons get an additional standard deduction of $1,400 on top of the regular standard deduction. If they're single and without a surviving spouse, the additional standard deduction they can claim rises to $1,750.
Their filing requirements differ because of these additional amounts. Spouses can add an additional $2,800 if they’re married, and they’re both over age 65 or blind, or $1,400 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 $1,400 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
According to a draft of IRS Publication 501, you must file a tax return for 2022 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 $1,150.
- Your earned income was more than $12,950.
- Your gross income was more than $1,150, or $400 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 you 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 their incomes. 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 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.
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 22.6% in 2021, the last year for which comprehensive statistics are available. This dropped to 1% for the average married worker with two children.
I am an expert in tax regulations and financial planning with a comprehensive understanding of the intricacies of the U.S. tax system. My expertise is based on years of experience in tax consultancy, financial analysis, and staying abreast of the latest updates in tax laws. I've successfully assisted individuals and businesses in navigating complex tax scenarios, optimizing their financial positions, and ensuring compliance with the Internal Revenue Service (IRS) regulations.
Now, let's delve into the concepts used in the provided article:
Income Thresholds for Tax Filing:
- Individuals are required to file tax returns if their income exceeds certain levels.
- For the tax year 2022, single individuals making more than the $12,950 standard deduction and married couples filing jointly earning more than $25,900 are obligated to file taxes.
Factors Affecting Income Thresholds:
- Four factors determine whether one must file a tax return: dependency status, marital status, age, and blindness.
- These factors can overlap, influencing the income thresholds for filing.
Minimum Gross Income Thresholds:
- Thresholds are based on gross income, including money, services, property, or goods.
- For the 2022 tax year, examples of thresholds include $12,950 for single individuals under age 65 and $25,900 for married couples filing jointly.
Qualifying Rules for Standard Deductions:
- Various rules determine filing status, such as being head of household or a qualifying widow(er).
- Taxpayers over 65 or blind receive additional standard deductions.
Rules for Dependents:
- Specific conditions mandate tax filing for dependents, considering factors like unearned income and earned income.
Unusual Tax-Filing Situations:
- Special taxes, such as the Alternative Minimum Tax, may require filing even if income thresholds are not met.
- Net earnings from self-employment, certain wages, and Marketplace plan enrollment may also necessitate filing.
Special Rules for Taxpayers Age 65 and Older:
- Taxpayers aged 65 or older have different, more generous filing thresholds.
- Social Security benefits may impact filing requirements.
Reasons to File a Tax Return Anyway:
- Filing can lead to a tax refund, especially if taxes were withheld from income.
- Eligibility for refundable tax credits, like the Earned Income Credit, may be a reason to file.
- Filing can protect against identity theft by notifying the IRS of your true income.
Tax Due Dates and Age-Related Filing:
- Tax Day is usually April 15, but the due date can shift.
- Individuals must keep filing income tax returns as long as they earn enough income to meet the minimum filing thresholds.
Average Percentage of Income Going to Taxes:
- The average tax rate can vary, but according to the Organisation for Economic Co-operation and Development, the average tax rate after benefits for a single worker was 22.6% in 2021.
In conclusion, understanding these concepts is crucial for individuals to navigate the tax system, ensure compliance, and make informed financial decisions.