Do I have to file a tax return?

Not all Americans are required to file a tax return.

This may apply to you if you didn’t make enough money in 2021, relied primarily on Social Security income, or were unemployed for an extended period.

If your income does not exceed certain income thresholds determined by the IRS, you can skip filing a federal tax return. The income threshold will depend on your age, filing status and the type of income you received.

But even if you do not have to file a returnyou should consider filing a return because if you don’t, you may be leaving money on the table from tax credits such as the salvage refund tax credit or the tax credit. child tax.

Here’s how to determine whether or not you should file a return for the 2021 tax year (filed in 2022).

Why You May Not Need to File a Tax Return

Single filers do not need to file a tax return if their gross income does not exceed the standard deduction of $12,550, or $25,100 if they are married and filing jointly. This threshold is increased if you and your spouse are over 65 – it starts at $27,800 for those who are married and filing jointly.

The IRS says gross income includes all forms of money, property, goods, and services, including the sale of your home.

Some people are not required to file a tax return because of the way taxable income is calculatedexplains Nell Curtis, professor of accounting at Milwaukee Area Technical College in Wisconsin.

“Sometimes it’s because their income is below certain thresholds or because of the types of income they have,” Curtis says. “For example, Social Security has tax limitations, so if that’s someone’s main source of income, they might not need to file a tax return. “

There are exceptions to this rule.

Taxpayers earning less than these amounts may be required to file a return if specific situations apply to them, such as the need to pay special taxes or if the taxpayer received net self-employment income of $400 or more, says Curtis.

Another exception is if you received the Advanced Premium Tax Credit when you signed up for health insurance coverage through the marketplace created by the Affordable Care Act, you will need to file a tax return. with a completed Form 8962 attached.

File a tax return to claim refundable tax credits and taxes paid

For 2021, you should consider filing a tax return to claim certain refundable tax credits.

If you think we owe you stimulus money, you may need to file a tax return to claim the salvage rebate credit. Consumers Eligible for Recovery Rebate Credit and Didn’t Receive Round 3 of Stimulus Payments must file a 2021 tax return to claim their missing money.

You must also file a return if you are expecting a tax refund or if you will receive one of the many credits available, such as refundable credits, earned income credit, additional child tax credit, American Opportunity, Recovery Rebate Credit, or Credits for Sick and Family Leave, says Brent Lipschultzpartner and CPA of the New York tax and accounting firm EisnerAmper.

Those who would not typically file will likely be eligible to file for free using IRS Free Filea public-private partnership between the IRS and several tax preparation and filing software companies.

There are two versions: one for people who have made an adjusted gross income (AGI) of $73,000 or less and those who also have to file tax returns. The advantage of using the free File tool is that the online form will do the calculations for you. There is another free version for people who have earned over $73,000 and does not offer the ability to file state taxes. This version also only performs basic calculations with a limited amount of hints.

Read more: How to file your taxes for free

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