Whether you’re employed part-time or full-time, you’re likely required to file a tax return to report your income. However, people who fall within a limited set of categories don’t always have to go through this yearly process. If you have doubts about your filing requirements, here is a quick guide on when you don’t need to file taxes with the IRS and why you might want to do it even if it’s not mandatory.

When Is Filing Not Required?

No Income

If you’re not employed and don’t receive any income from retirement accounts or other financial assets, you don’t have to file taxes. This stipulation typically applies to stay-at-home parents and full-time college students.

Earn Less Than the Standard Deduction

Taxpayers who don’t itemize their deductions can take a standard deduction to reduce their taxable income. For the 2019 tax year, for example, single individuals can deduct as much as $12,200, while married couples filing jointly can deduct $22,400.

If you received income but received less than your standard deduction amount, you aren’t required to file.

Unearned Income Falls Below IRS Thresholds

Unearned income refers to money acquired through activities that don’t involve employment, such as alimony payments, stock dividends, disability benefits, and savings account interest.

If you don’t have additional income and your unearned income falls below $1,100, you don’t need to file. However, if you earn more than this amount, you will need to submit a tax return, even if you’re claimed as a dependent by someone else, such as children claimed by parents.

Only Receive Social Security Benefits

If you’re 65 years or older and Social Security is your only income, you likely won’t be required to file. However, if you earn income from other sources, such as retirement accounts, or you’re married filing separately, you may need to file. Since these situations can vary depending on individual circumstances, it’s best to consult a qualified tax planning professional.  

Why Should You File Taxes Even If You Don’t Have To?

While you may not have to file, the IRS may still owe you a tax refund. For example, if you’re a part-time worker who had too much deducted from your checks, you may be entitled to a refund.

In other cases, individuals may also qualify for various tax credits. These credits can further boost the refund you get from the government.

If you’re unsure about your tax filing requirements, Tudor Wilson & Associates, CPAs, will provide you with the answers you need. Serving clients throughout Oahu, these Honolulu, HI, certified public accountants will review your income and financial activities to determine your requirements and help you avoid penalties for not filing. Whether or not you must file, these professionals will also help prepare your tax return to ensure you’re not paying more than you have to and getting an optimal refund. Visit this firm online to learn more about these services, or call (808) 592-2000 to schedule a consultation.