Coming into the new year tends to invite a bunch of new responsibilities that need to be taken care of. But one responsibility that shouldn’t be forgotten is your taxes!
Taxes are not due until Monday, April 15th, but that doesn’t mean you can’t get ahead of the game.
Here’s who needs to file a tax return in 2024
Most U.S. citizens and permanent residents who work in the United States need to file a tax return if they make more than a certain amount for the year. The IRS has a variety of information available on IRS.gov to help taxpayers, including a special “free help” page.
Factors that affect whether someone needs to file a tax return
Some factors will determine whether or not someone is required to file a tax return. One factor that plays into this, is your gross income.
Gross income means all income a person receives in the form of money, goods, property, and services that aren’t exempt from tax. This includes any income from sources outside the United States or from the sale of a main home, even if you can exclude part or all of it.
Something to also consider is the required filing threshold. People need to see if their gross income is over the required filing threshold. Filing statuses have different income thresholds, so individuals may need to consider their potential filing status as well.
There are five filing statuses:
- Single
- Head of household
- Married filing jointly
- Married filing separate
- Qualifying surviving spouse
For example, if an individual is single, under the age of 65 at the end of 2023, and makes at least $13,850, they are required to file a tax return. Find details on tax filing requirements with Publication 501, Dependents, Standard Deduction, and Filing Information.
Tax year 2023 filing thresholds by filing status
| Filing status | Age at the end of 2023 | A person must file a return if their gross income was at least: | |||
| Single | Under 65 | $13,850 | |||
| Single | 65 or older | $15,700 | |||
| Head of household | Under 65 | $20,800 | |||
| Head of household | 65 or older | $22,650 | |||
| Married filing jointly | Under 65 (both spouses) | $27,700 | |||
| Married filing jointly | 65 or older (one spouse) | $29,200 | |||
| Married filing jointly | 65 or older (both spouses) | $30,700 | |||
| Married filing separately | Any age | $5 | |||
| Qualifying surviving spouse | Under 65 | $27,700 | |||
| Qualifying surviving spouse | 65 or older | $29,200 |
If you qualify as a self-employed individual, you must file an annual return and pay an estimated tax quarterly if you had net earnings from self-employment of $400 or more. If you are currently a dependent person, you may still be required to file a return. Ultimately, it depends on your gross income.
When it comes to your earned income, this includes salaries, wages, tips, professional fees, and other amounts received as pay for work performed.
As for unearned income, this would correlate to an investment-type income. It includes interest, dividends capital gains, rents, royalties, etc. Distributions of interest, dividends, capital gains, and other unearned income from a trust are also unearned income to a beneficiary of the trust.
It is important to remember that a parent or guardian must file a tax return for dependents who need to file but aren’t able to file for themselves.
Potential benefits when people file a tax return
Now, the biggest thing that people look forward to while doing their taxes is their tax returns. In some cases, people may get money back when they file their taxes, but this isn’t possible unless you file your taxes!
It’s also important to fill out your taxes so you can avoid interest and penalties by filing an accurate tax return on time and paying any tax you owe before the deadline. It is recommended that the applicants fill out their application on time, but it is possible to request an extension to avoid some penalties. If they owe a tax debt and can’t pay all or part of it, the IRS can help.
Reporting income on a tax return is also important for self-employed people because this information is used to calculate their Social Security benefits. Any unreported income can lead to an incorrect calculation. When people report all their income, they give lenders an accurate financial picture to determine the loan amounts and rates they may receive.
Some people should consider filing even if they aren’t required
Not everyone meets the requirements to file. However, if they make less than the filing threshold, it’s in their best interest to apply, as they may get money back. This could apply to them if they:
- Have had federal income tax withheld from their pay
- Made estimated tax payments
- Qualify to claim tax credits such as:
- Earned Income Tax Credit
- Child Tax Credit
- American Opportunity Tax Credit
- Credit for Federal Tax on Fuels
- Premium Tax Credit
- Health Coverage Tax Credit
- Credits for Sick and Family Leave
- Child and Dependent Care Credit