Do i need to do a tax return

Because, when you file, you might find that you qualify for tax credits or deductions that could get you a refund. That’s money back in your pocket.

Table of Contents Show

Income requirements
Credits may earn you a tax refund
File now, deduct later
Protect yourself from future audits
How do I know if I am required to file a tax return?
Is it mandatory to file tax returns in UK?
Is it mandatory to file income tax return?
Do I need to file taxes Singapore?

In fact, the IRS says that typically, more than 70% of people who file a tax return receive a refund.

[Visual of a pie chart highlighting 70% and the statement: Typically more than 70% of people who file a tax return receive a refund according to the IRS. Source: irs.gov.]

So let’s take a look at how to know if you need to file—and whether you might want to.

There are a number of factors that determine whether or not you are required to file a federal income tax return.

These are typically related to your age and your filing status—which refers to IRS categories related to marital and family status,

[Visual of a list of categories including “Single,” “Head of Household,” “Married filing jointly,” “Married filing separately,” and “Qualifying widow(er) with dependent child”]

whether you’re claimed as a dependent and your income.

How it works: Depending on your filing status, if your “gross income” is below a certain threshold, you may not be required to file federal income taxes. Your “gross income” is all your taxable income before deductions—that includes wages from an employer, but also money from freelance or side jobs like babysitting or dog walking—and income from investments or real estate, among other things.

So let’s say you’ve done your research and have figured out that you aren’t required to file your federal income taxes this year. Why bother, right? Well, you might benefit from filing. Let’s take a look at two of the most common reasons:

[Caption: Reason 1: Refundable tax credits.]

Reason #1: You might qualify for refundable tax credits.

If you had a very low gross income, if you were in school or taking classes, or if you have a child, you might qualify for what are called refundable tax credits. These are tax credits that can trigger a refund if they reduce what you owe the IRS to below zero. That means that the IRS would be sending you a refund check for all or a portion of that credit.

[Visual of a chart titled “Tax bill,” showing the amount owed being less than $0.]

[Caption: Reason 2: Too much withheld.]

Reason #2: The federal income taxes withheld from your paycheck might be more than you actually owe.

If you have a job where your employer withheld federal income taxes from your paycheck for you but you didn’t meet the mandatory filing requirements, you might want to file anyway. You may be eligible for deductions and tax credits, which means you could get some of the money that was already paid toward federal income taxes back.

The IRS won’t typically track you down to give you any refund you’re due.

In order to claim a refund, you have to file a tax return.

The specific factors that determine whether you need to file typically change a little bit each year.
You can find information on whether you need to file by visiting IRS.gov and filling out an interactive questionnaire.

[Visual of an internet search for “Do I need to file a tax return?” and a mouse click revealing a representation of the IRS interactive questionnaire.]

Knowing if you need to file, and what to expect when you do, can help make the process that much easier.

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Better Money Habits

Neither Bank of America Corporation nor any of its affiliates provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions. The material provided on this video is for informational use only and is not intended for financial or investment advice. Bank of America and/or its affiliates assume no liability for any loss or damages resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment management. © 2018 Bank of America Corporation.

For information on the third coronavirus relief package, please visit our “American Rescue Plan: What Does it Mean for You and a Third Stimulus Check” blog post.

Key Takeaways

• It's perfectly legal to file a tax return even if your income falls below the IRS minimum requirement to file.

• If you qualify for certain tax credits but owe no tax, you might be able to claim the excess tax credit as a refund when you file your return.

• Filing a tax return typically starts the clock running for the amount of time the IRS can audit your return for a given year. If you don't file, the IRS can come back and perform an audit for that year.

Any year you have minimal or no income, you may be able to skip filing your tax return and the related paperwork. However, it's perfectly legal to file a tax return showing zero income, and this might be a good idea for a number of reasons.

Income requirements

Even if you earned income last year, if it falls below the IRS minimum you don't have to file a tax return. The minimum varies according to your age and filing status—whether you are:

single,
head of household,
filing jointly with your spouse or
you can be claimed as a dependent on someone else's taxes.

The IRS also adjusts the minimum amount of earned income from year to year for inflation. Individuals who fall below the minimum may still have to file a tax return under certain circumstances; for instance, if you had $400 in self-employment earnings, you'll have to file and pay self-employment tax.

If you have no income, however, you aren't obligated to file.

Credits may earn you a tax refund

The IRS offers a number of tax credits that you can take directly off your taxes rather than your income like a deduction. If the credit is more than you owe in taxes, in some cases, you can claim the excess credit as a refund.

If you qualify for tax credits, such as the Earned Income Tax Credit or Additional Child Tax Credit, you can receive a refund even if your tax is $0. To claim the credits, you have to file your 1040 and other tax forms.

For your 2021 tax return only, the Child Tax Credit is expanded by the American Rescue Plan raising the per-child credit to $3,600 or $3,000 depending on the age of your child. The credit is also fully refundable for 2021. To get money into the hands of families faster, the IRS will be sending out advance payments of the 2021 Child Tax Credit beginning in July of 2021. For updates and more information, please visit our 2021 Child Tax Credit blog post.

TurboTax Tip: If you qualify for tax credits, such as the Earned Income Tax Credit or the Child Tax Credit, you can receive a refund even if your tax is $0. To claim the credits, you have to file your 1040 and other tax forms.

File now, deduct later

The IRS limits how much you can claim with various deductions and credits. For example, you can't claim a home office deduction so large that it would put your business into the red. Instead, you claim zero business income for the year, and carry any leftover deduction into the next year.

If you have deductions or credits carrying over,

you can't claim them if you have no income, but
you need to file your taxes to claim them in a future year when you do have income.

Protect yourself from future audits

The IRS operates under a statute of limitations when it comes to auditing old tax returns.

If you've reported your information accurately, in most cases they can only go back three years. However, the clock only starts for a given year when you actually file your tax return.

If you don't file, the IRS can always come back and perform an audit.
For this reason, the IRS recommends that even if you don't file, you still keep any relevant financial records indefinitely.

Let an expert do your taxes for you, start to finish with TurboTax Live Full Service. Or you can get your taxes done right, with experts by your side with TurboTax Live Assisted. File your own taxes with confidence using TurboTax. Just answer simple questions, and we’ll guide you through filing your taxes with confidence. Whichever way you choose, get your maximum refund guaranteed.

How do I know if I am required to file a tax return?

A tax return is necessary when their earned income is more than their standard deduction. The standard deduction for single dependents who are under age 65 and not blind is the greater of: $1,150 in 2022.

Is it mandatory to file tax returns in UK?

Most employees working in the UK pay all their tax through the PAYE system and are not required to submit a tax return. You may, however, need to complete a tax return because your tax affairs are complicated in some way, for example by having a source of untaxed income, in addition to your employment income.

Is it mandatory to file income tax return?

According to tax rules, filing of return of income is mandatory where an individual's gross total income is more than Rs 2,50,000 in a financial year. However, an individual who may not have taxable income is also required to file his income tax return if he meets some conditions.

Do I need to file taxes Singapore?

Filing of personal tax return for tax resident is mandatory if your annual income is S$20,000 or more. Tax residents do not need to pay tax if your annual income is less than S$20,000. However, you may still need to file a tax return if you have been informed by Singapore tax authority to submit your tax return.