Tax pros say they field two related questions all the time regarding tax-filing requirements. They are: Do I need to file a tax return, and how much do you have to make to file taxes?
The answer to either question is pretty simple, if you're just considering income. But experts say there are some other considerations, especially because you might be entitled to a refund you wouldn't otherwise be able to claim. If you're wondering if you need to file taxes in 2018, read on.
If you're a single filer who was under the age of 65 at the end of 2017, and you earned less than $10,400, you generally do not have to file taxes this year. If you're married filing jointly and you're both under 65, you probably don't have to file taxes if you collectively earned less than double that amount above, for a total under $20,800.
The rules are different for older people. If you're married filing jointly and either you and your spouse (but not both of you) was over 65 at the end of last year, you don't have to file taxes if you made less than $22,050. If you're single and 65 or older, you don't have to file taxes if you made less than $11,950. If you're married and both of you are 65 or older, you don't have to file if you earned less than $23,300 in 2017. (There are slightly different rules if you're a widow or widower; the I.R.S. has the breakdown in table 1-1 of this document here.)
Even if you technically don't have to file a tax return, you might want to. Why? If you're below any of these thresholds, you might want to file anyway because there are some sizable tax breaks available, especially if you have kids or if you're paying for education.
“The top credit you may miss out on if you don’t file when you are not required to would be the American Opportunity Credit,” said Mark Jaeger, director of tax development at TaxAct.
The American Opportunity Tax Credit, or AOTC, is a tax break of up to $2,500 if you paid for qualifying educational expenses — including tuition, books, and other course materials — for yourself or a dependent in 2017. “Since this is a refundable credit, you may miss out on this money if you do not file your return,” Jaeger said. I.R.S. guidelines say 40% of this credit is refundable, which means you could get a refund of $1,000 even if you don't owe any federal income tax.
The other big credit experts say people often miss out on by not filing is the Earned Income Tax Credit (EITC). Lisa Greene-Lewis, tax expert for TurboTax, said many people are under the mistaken impression that this credit is only for very low-income Americans; in reality, it's actually meant to help out taxpayers and families of both low- and moderate-income.
To qualify for the EITC, you must have earned some income, and the caps for eligibility are higher than you might imagine. Single filers who earned up to $15,010 last year could get a credit of up to $510, according to TurboTax. If you're married filing jointly with three or more kids, you can be eligible even with an income of up to $53,930, and could get a credit of up to $6,318. (The I.R.S. has more details about income thresholds relative to family size here.)
Finally, your health insurance status might compel you to file taxes for 2017. Regardless of how much you make, you'll need to file taxes if you get a credit on health insurance premiums through the Affordable Care Act, Greene-Lewis said. “If you bought health insurance through the marketplace, you need to claim your healthcare status,” she said. “To keep the premium tax credit, you have to file to prove your income.”
If you purchased health insurance through the marketplace, you should have received a form 1095-A. The I.R.S. has instructions about what to do with it — and who to contact in your state if you think you should have gotten this form, or if the information on it is incorrect — at this link. If you received advanced payments of that credit and plan to do so next year, the IRS advises, taxpayers "should file their tax return timely to ensure they can receive advance payments next year from their marketplace."
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