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According to the Tax Policy Center, an estimated 40% of Americans will not pay federal income tax for the 2022 tax year (returns must be filed by April 18).
“Why? Are they tax fraud?” You might wonder as you stare at what appears to be unreasonably high taxes.
Scammers exist, but there are also tens of millions of households who are not legally obligated to pay taxes or even have to file returns.
of used by the IRS The income threshold, technically known as the “filing requirement,” for determining whether a taxpayer is required to file a return.
The exact filing threshold depends primarily on your tax filing status and gross income. Age is also a factor.
Here’s how it works:
What is your application status?
Your federal tax filing status can change from year to year, but this usually only occurs in connection with major life changes such as marriage or divorce.
For the 2022 tax year, your tax status is single, head of household, jointly filing jointly married, separately filing married, or eligible living spouse, unless someone else declares it as a dependent on your return. one of the
Continue reading for a breakdown of the submission requirements for each of these statuses.
What is your total income?
Again, whether or not you need to file a federal tax return depends primarily on your taxpayer status and gross income. In this particular context, the IRS defines “gross income” as “income from sources outside the United States or the sale of a main home (even if some or all of it can be excluded).
However, it can get a little tricky.For example, gross income does not include social security benefits otherwise “(a) you were married and lived with your spouse at any time during 2022, or (b) half of your Social Security benefits plus other gross income and tax-free interest of $25,000. ($32,000 if married),” the IRS said.
If any of these situations apply, Form 1040 Instructions Helps you understand the taxable portion of Social Security benefits that must be included in your gross income. Alternatively, we recommend that you check with your tax accountant or financial advisor.
Are you over 65?
Your age may or may not affect your threshold for federal income tax return requirements. Basically, people over 65 have a slightly higher threshold as well as a slightly higher standard deduction.
For the 2022 tax year, the IRS considers you to be 65 years of age or older if you were born before January 2, 1958, which means you were born before January 1, 1958.
single
If you are single in tax filing status for the 2022 tax year and:
- Under 65 last year: If your gross income is $12,950 or more, you must file a 2022 federal income tax return.
- Over 65 last year: If your income is $14,700 or more, you must declare it.
Head of household
“Head of household” is IRS jargon and has a stricter definition than you might imagine. To use this application status, you must meet certain requirements. Generally, this includes being unmarried, paying more than half of your home maintenance costs, and having dependents or other eligible people living with you.
If your 2022 application status is Head of Household and:
- Under 65 last year: If your gross income is $19,400 or more, you must file your 2022 return.
- Over 65 last year: If your income is $21,150 or more, you must declare it.
Husband and wife joint application
If the 2022 application status is Married Couple Application:
- Both you and your spouse were under the age of 65 last year: If your combined gross income (for the two of you) is $25,900 or more, you must file your 2022 return.
- Only one person was over the age of 65 last year: Submission required if total gross income is $27,300 or more.
- Both were over the age of 65 last year.: Submission required if total gross income is $28,700 or more.
These thresholds assume that you were living with your spouse at the end of 2022, or if your spouse died last year, you were living with your spouse at the time of death.
If you were not living with your spouse at the end of the year or at the time of your spouse’s death in 2022, you must file a 2022 return if your gross income is $5 or more, regardless of age. In other words, the IRS is effectively treating you as if your 2022 application status is Married Application. Separatelyand proceed.
Marriage registration separate payment
If your 2022 filing status is marriage filing, regardless of age, you must file your 2022 return if your gross income is $5 or more.
Yes, you read that right: it’s only $5. The filing threshold for this filing status is significantly lower than the threshold for all other filing statuses. This is one of several ways the IRS treats married couples who file separate returns differently than other taxpayers. Another example is certain tax credits that you may not be eligible for if you apply separately, even if you are otherwise eligible for the credit.
Eligible Surviving Spouse
Eligible surviving spouse status is generally reserved for widows and widowers whose spouse died a few years ago.
Suppose the taxpayer’s spouse dies in 2022. The IRS considers the taxpayer to have been married during her 2022 tax year, and therefore normally allows a widow or widow to file her 2022 joint return as a married person. However, it is possible that the spouse could use her 2021 or taxpayer 2022 eligible living spouse status if she died in 2020.
The application thresholds and standard deductions for this application status are essentially the same as for married applications. This is about double that of singles. Eligible surviving spouse status can therefore effectively postpone that drop-off for several years and help soften the financial blow of losing a spouse.
If you are an eligible surviving spouse with 2022 application status and:
- Under 65 last year: If your gross income is $25,900 or more, you must file your 2022 return.
- Over 65 last year: If your income is $27,300 or more, you must declare it.
If you are unsure whether you qualify for this application status or any other application status, please contact the IRS for freeWhat is my application status?Tools to get better ideas.
What about dependents?
Dependents typically do not file their own tax returns, they are simply listed as dependents on their parents’ or guardians’ returns. However, if your dependents have income, the question of whether or not you need to file can become a thorny issue. The threshold for claiming depends on marital status, amount of earned and unearned income, age, and whether or not you are blind.
For more information, see: Table 2 Listed in IRS Publication 501.
