Do I Need to File a Tax Return?

You are required to file an income tax return if your income is above a certain level each year. In general, you do not need to submit a federal tax return if your total income for the year does not exceed certain thresholds. Factors such as age, disability, income, and filing status will govern whether you are obligated to file a tax return.

2019 Filing Requirements

(for taxes due in April 2020)

Filing Status and AgeMinimum TI Requirement
Single (under age 65)USD 12,200
Single (65 and over)USD 13,850
Joint (under age 65)USD 24,400
Joint (both 65 and older)USD 27,000
Married filing separately (MFS)USD 0

Important Note: For 2018–2025, all taxpayers married filing separately (MFS) must file a return.

Filing Status Types

Single

This status normally applies if you aren’t married. It applies if you are divorced or legally separated under state law.

Married Filing Jointly

If you’re married, you and your spouse can file a joint tax return.

  • Common law marriage recognized
  • Separated under a temporary order
  • Legally married same sex couples (Windsor decision)

If US citizen or resident alien married to a nonresident alien, he/she is not considered married.

Head of Household

In most cases, this status applies if you are not married, but there are some special rules.

  • Unmarried or legally separated on December 31
  • Must have a qualifying individual (except: Qualifying individual can be used by a former spouse, but if a child lives with a taxpayer, head of household is allowed)
  • A dependent parent does not have to live with the taxpayer
  • The goal for divorced parents is to both be head of household
  • Adult non-dependent child: Not allowed
  • Qualified dependent must live more than 50% of the time in the taxpayer’s household
  • Dependent can’t provide more than 50% of own support

Example 1: Head of Household or Not?

John is 28 and single. He maintains his own needs. His brother, who is 15, lives with him all year. John’s brother has a gross income of over USD 4,200. However, John maintains over half of his support.

John can claim head of household filing status. His brother stays in his home over half of the filing period. Also, his brother is under age 19, and meets the relationship test, and regarded as a qualified child

Example 2: Supporting a Parent and Head of Household status?

Janice is single and supports, and pays living expenses of his father in another city. Janice pays over half of her father’s support. Janice’s father receives USD 30,000 social security benefits and USD 3,200 pension income per year. He also receives interest income of USD 750.

Janice can claim head of household filing status because her father is a qualified dependent. Generally, a parent does not have to live in the same household, and his/her net worth is not considered as a factor.

Qualified dependent must pass gross income of USD 4,200 to be taxed. In our case, her father’s social security benefits are not taxed, and his taxable gross income is less than the minimum amount.

Surviving Spouse

If you are the surviving spouse, the year your spouse died is the last year for which you can file a joint return with that spouse. After that, if you don’t remarry, you must file as a qualifying widow(er), head of household, or single.

  • File as surviving spouse for the two subsequent years

U.S. Citizen or Resident Alien Married to Nonresident Alien

If US citizen or resident alien married to a nonresident alien, he/she is not considered married.

  • Is eligible to file as head of household
  • May elect to treat the nonresident spouse as a U.S. resident and file a joint return

Innocent Spouse Relief

Many married taxpayers choose to file a joint tax return because of certain benefits this filing status allows them. When filing jointly, both taxpayers are jointly and severally liable for the tax and any additions to tax, interest, or penalties that arise from the joint return even if they later divorce. In some cases, however, a spouse can get relief from being jointly and severally liable.

  • Spouse didn’t know and didn’t have reason to know of the understatement
  • Two-year election deadline

Example 3: Innocent Spouse Relief Start Date?

IRS sent levy notice to both husband, and wife on February 5, 2019. IRS levies the husband’s employer on May 15, 2019. IRS also levies the wife’s employer on June 14, 2019.

The two-year statute start date for innocent spouse relief is February 5, 2019, in our example.

Married Filing Separately

A married couple can choose to file two separate tax returns. This may benefit you if it results in less tax owed than if you file a joint tax return. You may want to prepare your taxes both ways before you choose.

Generally, a separate tax return is used for minimizing Adjusted Gross Income floors for 7.5% for medical expense, and 10% for qualified casualty losses and avoiding Section 1231 gain or loss netting.

Filing Status Amendments

IRS allows you to change your filing status for a tax return you’ve already filed if no more than three years have passed since the original tax filing deadline.

You can’t change from married filing jointly to married filing separately after original April 15 filing deadline.

Dependency Tests

Qualifying Child

  • Relationship — includes siblings and their children
  • Age — 19 (24 for full-time students)
  • Child must live with you (or your spouse if you file a joint return) in the United States for more than half of the year
  • Child has not provided more than half own support
  • The dependent is younger than the taxpayer
  • Has not filed a joint return with their spouse except to claim a complete refund
  • Residency test — Time at school, hospital, military or prison not included

Example 4: Eligible Dependent or Not?

George is 16 and lives with his mother. He gets 1/3 support from his mother, 1/3 from a grandparent, and 1/3 from a trust. George’s mother does not provide more than 50% of George’s support, and George does not provide more than 50% of his own support. 

George’s mother may files as head of household with George as the qualifying dependent.

Tiebreaking Rules

If eligible taxpayers cannot agree on who qualifies to claim the benefits for a dependent, the following rules apply:

  • Parent before grandparent
  • If non-parent is claiming the dependent, must have AGI higher than the parents
  • Individual with whom the child resided for the longest period of time during the year. Count nights for determining residence.
  • In the case of two parents with equal custody nights, the dependent goes to the parent with the highest AGI
  • Dependent must be younger than the taxpayer
  • Dependent cannot file MFJ return except for complete refund

Example 5: Tiebreaker Rules

John and his mother, Amy, reside with Amy’s father. Amy, her father, and John’s father are eligible to use John as a qualifying dependent.

Amy’s father may claim John if his AGI is greater than that of either Amy or John’s father.

Qualifying Relative

  • Relationship or member of household
  • Gross income test — Less than USD 4,200 for 2019
  • Support test
  • Not a qualifying child
  • Residency test

Example 6: Qualifying Relative

Henry’s father received USD 20,000 of Social Security benefits, USD 3,000 of pension income, and had USD 1,000 of interest income.

Henry’s father passes the gross income test for being a qualifying relative because Social Security benefits are not taxable.

Henry must provide more than 50% of his father’s support to claim him. She must provide at least USD 24,001 of support.

You may want to file a tax return to benefit tax breaks and credits. Also, you need to check your state tax filing requirements. You might have to file a state or local tax return even if you do not have to submit a federal tax return.

Sources: IRS and AICPA materials are used for this post.

Author

Covers investment, financial analysis and related financial market issues for BrightHedge. He has extensive experience in portfolio management, business consulting, risk management, and accounting areas.

Subscribe
Notify of
1 Comment
Inline Feedbacks
View all comments

Important Information

The investment information, comments and recommendations contained herein are not subject to investment advice. The comments and recommendations contained herein are based on personal views. These views may not fit your financial situation and your risk and return preferences. For this reason, based only on the information contained herein, investment decisions may not have the appropriate outcome.