Are You Sure You Earned Enough? [Minimum Income to File Taxes]

It's that time of year when people begin wondering whether they need to file a federal income tax return.

When in doubt, I say go ahead and file your return.

But I know you guys want numbers, so I'm going to give them to you.

The minimum income to file taxes isn't one number that you can just compare your income to.

There are a series of questions you should answer to help you come up with the minimum income amount that applies to you. Let's start with the IRS questionnaire found on their “do you need to file” page.

The questions are designed to help you determine whether you need to file a federal tax return and whether you need to adjust your Form W-4 to eliminate withholding.

The IRS has stated that they want to help eliminate wasted time and money from returns that are filed that shouldn't be. I say you take them up on that offer and work through the questions.

According to the IRS website, answering these question should take you no longer than 10-15 minutes, which is certainly worth your time, especially if it saves the time it would take to file or if it saves you money that shouldn't be withheld.

There are a series of questions you should answer to help you come up with the minimum income to file taxes that applies to you. Let's start with the IRS questionnaire found on their

If you'd like a preview of what you'll be asked on the IRS questionnaire, here are the pertinent questions:

  • Did you have Federal taxes withheld from your pension and wages for 2016 and wish to get a refund back?
  • Are you entitled to the Earned Income Tax Credit or did you receive an Advance Earned Income Credit for 2016?
  • Did you receive unemployment income?
  • Were you self-employed with earnings of more than $400?
  • Did you sell your home?
  • Will you owe any special tax on a qualified retirement plan (including an IRA or a Health Savings Account [HSA])? You may owe tax if you:
    • Received an early distribution from a qualified plan
    • Made excess contributions to your IRA or HSA
    • Were born before July 1, 1946, and you did not take the required minimum distribution from your qualified retirement plan
    • Received a distribution in the excess of $160,000 from a qualified retirement plan
  • Will you owe Social Security and Medicare tax on unreported tip income?
  • Will you be subject to the Alternative Minimum Tax (AMT)?
  • Did you earn $108.28 or more from a tax-exempt church or church controlled organization?
  • Did you receive an advance payment on the Premium Tax Credit?

If you answer yes to any of those questions then you should file a federal tax return regardless of your earnings.

Right away you should see that if you have self-employment income of more than $400 then you need to file.

If you answer no to all of the questions, then you might be able to avoid filing.

The next question you need to ask is whether someone else can claim you as a dependent. If you are not a dependent AND you are under 65 years of age, then you won't need to file taxes unless you income exceeds (numbers updated for tax year 2015):

  • $10,350 (single filer),
  • $13,350 (head of household),
  • $20,700 (married filing jointly),
  • $16,650 (qualifying widower with dependent child).

Note that if you are married, filing separately, you will need to file a return.

Note that for those filers 65 and older, the income numbers are slightly higher for some filing types. See the IRS questionnaire for more info on this.

If you are a dependent then you follow a different set of rules. It's sort of complicated, but basically, if you are a dependent who is under 65 who has unearned income (i.e. interest income) over $1,050, or earned income (i.e. wages) over $6,300, or if your combined earned and unearned income exceeds $6,300, then you need to file.

If your income is in the lower range and you are just not sure what to do, you can always start to complete a federal tax return through a free filing service like the one TurboTax offers. Their software should help you determine if filing is even necessary.

Always, I repeat, ALWAYS file if you had taxes withheld from your paycheck or if you suspect you might qualify for a refundable tax credit, like the child tax credit, education credits, etc.

What about you? Did you earn enough to file?

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Last Edited: March 20, 2017 @ 6:52 amThe content of ptmoney.com is for general information purposes only and does not constitute professional advice. Visitors to ptmoney.com should not act upon the content or information without first seeking appropriate professional advice. In accordance with the latest FTC guidelines, we declare that we have a financial relationship with every company mentioned on this site.
About Philip Taylor

Philip Taylor, aka "PT", is a CPA, financial writer, podcaster, FinCon Founder, husband, and father of three. He created PT Money back in 2007 to share his thoughts on money and to meet others passionate about managing their finances. All the content on this blog is original, and created or edited by PT. Read more about Philip Taylor, and be sure to connect with him on Twitter, Facebook, or Google+. Listen to the new podcast, Masters of Money!

Comments

  1. SiggitySal says:

    I worked some hours for a LLC this summer. None of the checks had taxes taken out.  I did earn a  little over 2000. Should i file a tax return for the work I did with them?

  2. I didn’t make enough, but they took money out if my checks. Don’t I get some of it back if I file? I don’t understand why I shouldn’t file. I want my money back.

  3. missawesomelissy says:

    Even if you withholding status is correct and you may not have to file, there can be reasons to file anyways. For us, on initial review, our refund would have been very low (less than 40 dollars, in the case of federal taxes – state is a whole different ball game) and not necessarily something I would go through just to get 40 dollars (taxes really stress me out). But there are a few credits that you can earn that will give you a refund even if you owe no money – those are really worth filing for me if you qualify. We qualified for one of them and were able to receive $1000 that we hadn’t just given to the government in the first place. Getting back money from taxes you had withheld isn’t the only way you can get money from the government. 

  4. missawesomelissy says:

    Even if you withholding status is correct and you may not have to file, there can be reasons to file anyways. For us, on initial review, our refund would have been very low (less than 40 dollars, in the case of federal taxes – state is a whole different ball game) and not necessarily something I would go through just to get 40 dollars (taxes really stress me out). But there are a few credits that you can earn that will give you a refund even if you owe no money – those are really worth filing for me if you qualify. We qualified for one of them and were able to receive $1000 that we hadn’t just given to the government in the first place. Getting back money from taxes you had withheld isn’t the only way you can get money from the government. 

  5. My brother has SS Disability and a pension of about 17-18k a year. Does he HAVE to file?

  6. chrismarklee says:

    I will run these numbers for free for anyone

    Chris

    Owner Cel Financial Services

    Registered bonded California CTEC Tax Preparer Please visit my website for all your Income Tax Fillmore needs.

    http://www.merchantcircle.com/business/CEL.Financial.Services.Tax.Preparation.Fillmore.805-625-0796

  7. Great post – here is a little bit more info and sort of one of my peeves:
    Why give the government an interest free loan every year? They aren’t going to give you one! Watch your payroll taxes -adjust during the course of the year the amount of deductions you have. If I get back $10 I am happy – If I have to pay $10 I am happy. I know that I brought home more money last year and was able to bank it in savings at least drawing some interest. For some weird reason people like to get money back at the end of the year – weird – try this – take the money you desperately need now and give it to someone you don’t know – make them promise to give it back to you next year.

  8. Looks like I did! The $400 filing limit for self-employed income is the most surprising thing to me though. Seems kind of low! But, I guess they are trying to be cautious.

  9. Just a note; socical security retirement benefits are not considered part of ones “income” for applying the threshold amounts. So a retiree with say $17,000 in SS benefits as his only income for 2010 would not be required to file a US tax return.

  10. Great points, Ryan. Thanks for chiming in.

  11. Even if you don’t have to file, you may want to. For dependents who work a part time job (high school or college students), you’ll get back all of your federal withholding if you don’t meet the threshold for tax liability.

    Another reason: To contribute to a Roth IRA, you have to prove you earned money in the year you make the contribution. If 16 year old Jimmy wants to open an IRA with $1,000, he has to prove that he actually made that money.

    • @Ryan
      Hi Ryan, if a child files late, do they get a penalty? She only paid $40 for 2011 federal income tax.
      If the penalty is more than $40 then she shouldn’t file.
      Thanks!