Do I Have to File Taxes?

In order to document your income, you will have to provide the trustee with proof of income, including, among other things, a copy of your most recently filed tax returns.  If you don’t timely provide your tax returns, your case can be dismissed.  But what if you don’t have to file taxes?  In that case, you will need to produce your most recently filed taxes and a valid reason for why you didn’t have to file your taxes.

Do I Have to File a Tax Return If I Did Not Make That Much Money?

A question that is more common than you may think is: Do I have to file taxes?  Believe it or not, some people are actually exempt from the Federal tax filing requirement.  Depending upon your income level, you may be exempt from the requirement of filing a tax return.  So how do you know if you make enough money to that you have to file taxes?  Here are the general rules:

Employment Classification

First, you need to consider your employment classification: are you an employee, or are you self-employed?  Self-employed means you have your own business or you work as independent contractor and receive a 1099 each year?  If you are an employee, then there is a much higher threshold, in the range of $10,000 to $22,000 gross annual income, depending upon your age and filing status.  If you made less than the threshold, you are exempt from the filing requirement.

Filing Income Threshold

To get the exact figures, which change each year, simply go to the IRS website and look at the instructions to the Form 1040 for the particular year for which you are filing.  The instructions to Form 1040 will have a chart (usually appearing in the first few pages of the instructions) that will set forth the threshold numbers for your tax year.  The chart is usually located in the beginning of the Form 1040 instructions, under the section, “Do you have to file?”

For 2019 filers (filing for the 2018 tax year), the instructions to Form 1040 provide that if you are under 65 years of age, a tax return is required to be filed only if you made at least $12,000 in gross income (if your filing status is single) or $24,000 in gross income (if filing status is married and both spouses are under 65).  If you are over 65, these numbers increase to $13,600 gross income (single), $25,300 gross income (married, and one spouse is over 65), or $26,600 gross income (married, and both spouses are over 65).

Does Social Security Income Count?

If you receive social security income (SSI), then you do not count the SSI income toward the threshold limits.  For example, if you received $15,000 in social security income plus $10,000 in employment income, you would be under the filing threshold and the filing of a tax return would not be necessary.

Self-employed

If you are self-employed, then there is a very low threshold point at which you must file taxes. For 2019 filers (filing for the 2018 tax year), the threshold number is $400. If you are self-employed and you had net earnings of $400 during the year, then you are required to file a tax return.

You May Want to File Taxes

Even if you don’t have to file, filing a tax return may be to your benefit.  If you were an employee and you made $8,000, you may want to file taxes to receive a refund check for any amounts that were deducted from your paycheck throughout the year.  Moreover, you may be entitled to a tax credit, which, again, could mean receiving a refund check from the IRS.  You may be entitled to various tax credits, including but not limited to, earned income credit, child tax credit, adoption credit, health insurance coverage tax credit, first-time home buyers credit, or other tax credits.

Consult with a Lawyer

Never take it upon yourself to determine whether you need to file taxes simply by reading information on a website.  Always talk to a lawyer.  The threshold numbers are always changing, and as with most areas of the law, there frequently are exceptions to the general rules.  Also, you should have a lawyer determine whether you should file to receive tax credits.