Contrary to popular belief, there are indeed situations where a person does not need to file a tax return every year. You do not need to file if you are single, under the age of 65, and your gross income falls below $12,200 ($13,850 if you are 65 or older). Likewise, if you are married filing jointly, both spouses are under 65, and your income is less than $24,400 ($25,700 if one spouse is 65 or older and $27,000 if both spouses are 65 or older. This applies to a qualifying widow(er) as well). If you are the head of the household and below 65, you don't have to file if your gross income is below $18,350 ($20,000 if 65 or older). A person who earns under $400 from self-employment is also not required to file. Any income made above this level has to be reported on a personal income tax return.
In addition, a person needs to file an income tax return if they sold their home during the tax year; owes taxes because of a retirement account from distributions or excess contributions; or owes Social Security and Medicare taxes on tips not reported to an employer or on wages for which the employer did not withhold taxes. If any of these events occurred, that person needs to file a return even if their earnings fall below the thresholds mentioned above.
Filing Anyway Might Be a Good Idea
While some people may not want to file an income tax return every year, there are various benefits that, if realized, might make it favorable to do so. Various tax credits can be earned by filing an income tax return, including earned income credit, child and dependent care credit, educational tax credit, and savers credit.
These credits might offset the amount of income taxes owed for people with small amounts of income and could in some cases even yield them more money than if they had not paid taxes on that small amount of income. It is important to always consult a tax professional prior to making a decision on whether to file a yearly income tax return.