A right hand with a ballpoint pen punches numbers into a calculator that's sitting next to tax forms.

How Do You Know if You Need to File A Tax Return?

By Paul Kasko

If you earn money in the U.S., you may be required to file a tax return on or before April 15th (aka Tax Day) of the following year... but not necessarily. How do you know for sure?

It seems like a straight-forward question, but even the IRS website makes is difficult to find a clear answer. You may want to start with the site’s Interactive Tax Assistant (or “ITA” as they call it) which is a survey called Do I Need to File a Tax Return? You can go online and take the survey at any time via that link as long as you are prepared to provide the following information:

If you’re not in need of a survey as thorough as the one provided by the ITA, and your question is really based on whether or not you earned enough money to be taxed, read on.

Taxes are Based on Age and Income Thresholds

At its simplest, taxes are based on your age and how much you make. You are required to file based on a minimum amount of income earned in a year. That amount is equal to what the IRS calls the “standard deduction.”

The standard deduction amount varies from tax year to tax year and most income earners in the U.S. are eligible to claim it. For 2021, the standard deduction amount is $12,550 as long as you are:

There you have it! If all of the above are true, and you earn less than $12,550 in 2021, you likely will not have to file a tax return. Although, if you have taxes withheld from your paycheck and you want the IRS to send you your refund, you will still have to file.

If you’re just not sure, or if you know you have special circumstances, the IRS offers free filing assistance to those who earn $57,000 or less per year. Call them at 1-800-906-9887 to find out if you can get help.

Still Need to File Your 2020 Tax Return?

According to David Alito, Deputy Commissioner of the IRS Wage & Investment Division, “There is usually no penalty for failure to file if you are due a refund, but why miss out on money that’s rightfully yours? If, however, you wait too long to file your return and claim a refund, you risk losing it altogether... an original return claiming a refund must generally be filed within three years of its due date.”

Filing your 2020 tax return, even if you were not required to, affects your eligibility for tax credits related to Coronavirus relief, as well, so it’s actually a good idea to go ahead and file so you won’t miss out if you’re eligible for benefits.

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