Topic 02 · 5 min read
Who Has to File — and Who Should Anyway
Not filing and not owing are two different things.
Filing is required once income passes a threshold that depends on filing status, age, and the kind of income. Below that line filing is optional — but often worth doing, because withheld tax and refundable credits are only paid out on a filed return.
What to know
- The income thresholds
- For most people the trigger is roughly the standard deduction for their filing status, adjusted each year.
- Self-employment has a low bar
- Net self-employment earnings of $400 or more require a return, even when no income tax is owed.
- Dependents have their own rules
- A teenager claimed on a parent's return files based on separate earned and unearned income limits.
- File to be paid
- Withheld tax, the Earned Income Tax Credit, and education credits are only received by filing.
- Refund claims expire
- Generally there are three years from the due date to file and still collect a refund.
The tax benefit
Filing a simple return that was never required is one of the most common ways low earners recover several hundred dollars they had already paid in.
Worked example
The optional return worth $610
A part-time worker earns $7,400 and owes no income tax, but $310 was withheld and a refundable credit adds $300. Filing brings back $610. Skipping it leaves the money with the government.
Watch out for
- Being claimed as a dependent does not stop you from filing your own return.
- Marketplace health insurance requires filing to reconcile the premium credit.
- A filing duty can exist even when a refund, not a balance, is the result.
Terms from this topic
Filing thresholdDependentRefundable creditStatute of limitations
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