You don’t need to know HOW to file a tax return (that’s our job!) but you do need to know WHEN to file a tax return. Not everyone is required to complete a tax return but if you fall under any category eligible to complete a return then you must.
Requirements to File a Tax Return
Below are the requirements to file a tax return. If you do not meet these requirements you do not have to file a tax return. If you paid in any income tax withholding throughout the year and are due a refund, you must file a tax return to request your refund, even if you are not otherwise required to file a tax return. If you do not file, you will not receive your refund.
Gross Income Test
You must file if your gross income is at least the amount listed for your correlating tax filing status:
- Single:
- Under 65= $12,200
- 65 or older= $13,850
- Married Filing Jointly
- Both spouses under 65= $24,400
- One spouse 65 or older= $25,700
- Both spouses 65 or older= $27,000
- Married Filing Separately
- $5
- Head of Household
- Under 65= $18,350
- 65 or older= $20,000
- Qualifying Widow(er)
- Under 65= $24,400
- 65 or older= $25,700
If your income is below the required amounts listed above but any of the following apply, you must file a tax return:
- You have a household employee that you must report employment taxes for
- You received a distribution from a health savings account or medical savings account
- You received a premium tax credit when applying for insurance on the Marketplace
- You received an early distribution from a retirement account
- You have net earnings from self-employment that are $400 or more
2019 Tax Brackets, Standard Deduction Amounts, and Filing Status
2019 Tax Brackets
| Rate | For unmarried individuals, taxable income over | For married individuals filing joint returns, taxable income over | For heads of households, taxable income over |
|---|---|---|---|
| 10% | $0 | $0 | $0 |
| 12% | $9,700 | $19,400 | $13,850 |
| 22% | $39,475 | $78,950 | $52,850 |
| 24% | $84,200 | $168,400 | $84,200 |
| 32% | $160,725 | $321,450 | $160,700 |
| 35% | $204,100 | $408,200 | $204,100 |
| 37% | $510,300 | $612,350 | $510,300 |
2019 Standard Deduction Amounts
| Filing Status | Deduction Amount |
|---|---|
| Single | $12,200 |
| Married filing jointly | $24,400 |
| Head of household | $18,350 |
Filing Statuses
It is important to choose the correct filing status so you qualify for the appropriate tax brackets, standard deductions, and other benefits. Choosing the incorrect filing status can either cause you to receive a smaller refund or cause you to receive too much that you will later have to pay back to the IRS, with interest and possibly penalties added.
Your filing status is determined by your status as of December 31, 2019. A common example is marriage. If you were single the entire year but got married on December 31, 2019, in the eyes of the IRS, you are considered married for the entire year.
There are five possible filing status options:
- Single
- Married filing jointly
- Married filing separately
- Head of household
- Qualifying widow(er)
Single
- Who qualifies: anyone who is not married or separated from a spouse via divorce or a separate maintenance decree.
Married Filing Jointly
- Who qualifies: anyone who is married and not legally separated or divorced. If a spouse passed away during the year, the surviving spouse can still file jointly for that year as long as they did not remarry.
Married Filing Separately
- Who qualifies: anyone who is married and not legally separated or divorced and elects to file separately.
- Caution:
- A majority of married taxpayers will owe more taxes by filing separately as there are quite a few lost credits and deductions when selecting this filing status.
- If you are married but filing separately and one spouse itemizes deductions, the other spouse must also itemize and is excluded from selecting the standard deduction.
Head of Household
- Who qualifies: unmarried people who paid more than half the cost to keep up a home for the year and provided over half of the support for at least one qualifying person.
Define “Unmarried”
- If you’re not legally married, OR If your spouse didn’t live in your home for the entire span of the last six months of the tax year, you paid more than half the cost of keeping up the house, and that house was your child’s main home.
- The cost of keeping up a home includes property taxes, mortgage interest or rent, utilities, repairs and maintenance, property insurance, food, and other household expenses.
- Your spouse cannot have been gone for the last six months due to a temporary absence such as illness, education, business, vacation, military service, or any other absence in which it is reasonable to assume that the spouse will return to the home after the temporary absence.
Define “Qualifying Person”
Qualifying Child:
- Either under age 19, a full-time student under the age of 24, or any age if totally and permanently disabled
- Must be your child, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, or descendant of any of them
Qualifying Relative:
- Cannot be anyone else’s qualifying child
- Must be related to you
- Must have gross income less than $4,200
As usual, there are some exceptions, exclusions, and one-off qualifying factors to some of the above general guidelines. Be sure to consult your tax professional for more specifics and to assist in selecting the appropriate tax filing status. At Verdant, we always provide initial consultations free of charge and are here to help you maximize your tax savings. Let’s meet!