Do I Need to File a Tax Return?
Minimum Income Requirements to File a Federal Income Tax Return
The minimum income required to file or efile a tax return for tax year 2009 depends on your income, age, and filing status. The minimum income levels for the various filing statuses are listed in the table below. If you earned below the minimum income for your filing status, you may not be required to file a Federal Tax Return. However, there are reasons why you may still want to file (discussed below).
| Filing Status | Age | Minimum Income Requirement |
| Single |
Under 65 |
$9,350 |
| 65 or older |
$10,750 |
| Head of Household |
Under 65 |
$12,000 |
| 65 or older |
$13,400 |
| Married, Filing Jointly |
Under 65 (both spouses) |
$18,700 |
| 65 or older (one spouse) |
$19,800 |
| 65 or older (both spouses) |
$20,900 |
| Married, Filing Separately |
Any age |
$3,650 |
| Qualifying Widow(er) with Dependent Children |
Under 65 |
$15,050 |
| 65 or older |
$16,150 |
Learn more about selecting a filing status
You May Want to File a Tax Return (Even if You Are Not Required To)
There are several reasons why you may want to file or efile a tax return even if you do not meet the minimum income requirements:
- If you had Federal Income Tax withheld from your pay, you must file to receive a refund.
- If you applied a prior year tax overpayment to this year, you must file to receive a refund.
- If you earned income from working but made a low income, you may qualify for the Earned Income Credit. This credit is refundable, but you must file to receive it. Learn more
- If you did not receive the Making Work Pay credit in your paycheck but you earned income from working, you can file to claim this refundable credit. Learn more
- If you received a government pension payment but did not qualify for the Making Work Pay Credit, you may file to claim the Government Retiree Credit, which is refundable. Learn more
- If you are a student, you may be able to claim the American Opportunity Credit. This credit is refundable, but you must file to receive it. Learn more
- If you have a qualifying child but are not able to claim the Child Tax Credit (because the credit amount is greater than the taxes you owe), you can file to claim the refundable Additional Child Tax Credit. Learn more
- If you otherwise qualify for the First-Time Homebuyer Credit (or the Long-Time Homeowner Credit) you must file to claim it. Learn more
What is Taxable Income and What is Not?
Gross income usually includes all payments you receive for services or property you own. The general categories include:
- Wages
- Salaries
- Fees
- Commissions
- Tips
- Fringe Benefits
- Stock Options
This list is general; there are many other forms of taxable income. Below is a broad guide to help the reader distinguish between taxable and nontaxable income.
Tips (for restaurant work, babysitting, valet services, etc.)
All tips that you receive on the job, whether the majority of your income is derived from tips or wages, is considered income and is subject to federal income tax. Non-cash tips in the form of gifts, tickets to sporting events, or other items of value, are subject to federal income tax.
You must report cash, check, or credit card tips to your employer so they can remove Social Security, Medicare, retirement tax, or any other applicable taxes from your total tips.
If you receive $20 or more in tip income in a single calendar month, you must report that income to your employer and they must withhold Social Security and Medicare tax. If you do not make more than $20 in tips in a single month, you do not have to report the income to your employer but you must report the income on your federal tax return.
Learn more in Publication 531, Reporting Tip Income
Alimony and Child Support
If you receive alimony from your spouse or former spouse, you must report the alimony as income in the year that you receive it.
Alimony payments that you pay during the tax year are only tax deductible if they are made under an official divorce or separation instruments and all qualifications are met. Payments that are not made under an official decree or agreement (e.g. a verbal consensus between two parents) are not tax deductible.
If you receive child support, that income is not taxable. If you pay child support, that payment is not tax deductible.
Learn more in Publication 504, Divorced or Separated Individuals
Scholarships
Scholarship and fellowship grant money is not generally taxable when it is spent on tuition, school fees, or required books and supplies. However, any funds spent on non-required expenses, such as housing costs and dorm fees, are usually considered taxable income.
Learn more about tax breaks for students
Gambling Winnings and Losses
Winnings from gambling are considered income and subject to federal income tax. You have to report gambling winnings on your tax return. You must include all cash winnings and the fair market value of non-cash winnings as taxable income.
You may deduct gambling losses if you itemize your deductions but gambling losses may not be more than gambling income reported on your return. In order to make deductions for your losses however you must produce a verifiable statement from the institution with whom the losses were incurred.
Learn more about gambling income and taxes
Moving Expenses
Moving Expenses can be tax deductible if you move for business and meet certain criteria. If you personally finance your moving expenses, the moving arrangement must meet two requirements to qualify as tax deductible: (1) Your new place of business must be at least 50 miles from your old home and (2) you must work 39 weeks out of the first 12 months right after you move to your new location.
If your employer pays for the cost of you to relocate, and the moving expenses would have been deductible if you had paid them yourself, you do not have to include the paid moving expenses as taxable income. If your employer pays your moving expenses, but you do not meet the criteria for tax deduction, i.e. your new place of employment is not at least 50 miles from your old home then you must include the employer financed move as gross income.
For example, if Joe gets a new job that is 35 miles away and his employer moves him 5 miles away from his new job, Joe must include the moving expenses paid by his employer as taxable income. If Joe’s new job is 1000 miles away and his new employer moves him 980 miles closer to his new job, the moving expenses paid by his company do not have to be included in Joe’s gross taxable income.
Learn more in Publication 521, Moving Expenses
Canceled Debt
As a general rule, debt that is canceled or forgiven by an official lender must be included in your taxable income. For example, if you settle a credit card debt for less than the full balance, you will owe income tax on the amount that was forgiven. There are varying circumstances in which the cancelled debt may be excluded from the calculation of your gross income. For instance, cancelled mortgage debt (on a primary residence) is not taxable through tax year 2011.
Learn more in Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments
Unemployment Compensation
Unemployment income must be included on your federal and state income taxes. Unemployment income includes all cash and non-cash remuneration received from the unemployment laws of the United States or of a particular state. This also includes disability benefits. You should receive a 1099 which will display the amount you were paid.
Learn more about unemployment income and taxes
Social Security and Railroad Retirement Benefits
Persons who only receive Social Security or equivalent railroad retirement benefits will probably not have to file a tax return. If you receive other income, however, you will have to file a tax return if your AIG is more than the base amount of your filing status.
Learn more in Publication 915, Social Security and Equivalent Railroad Retirement Benefits
Pension and Annuity Income
Pensions and annuities are either fully taxable or partially taxable depending on your contributions made to the plans. Your pension or annuity is fully taxable if all of the contributions were made by your employer prior to including it in your taxable wages or salary. Returns on payments made with after tax dollars are partially taxable. In that case you will not be charged tax on the cost of the plan or investment but only on the non-taxed interest accrued in the pension or annuity.
Learn more in Publication 575, Pension and Annuity Income
Bartering Income
When you exchange goods or services for other goods or services, e.g. you provide tax help for plumbing services, you must include those goods or services as taxable income. The value of the goods and services exchanged are determined by the fair market value of exchange between unrelated parties.
For a list of income that the IRS cannot touch visit Tax Free Income.
There are many other forms of income and adjustments to your gross income that are not included in this list. Some examples include, interest received, dividends, business income from a pass-through employer, capital gains and losses, lump sum distributions, renting property, earnings for clergy, 401 (k) plans, passive activities, stock options, traders in securities, exchange of policyholder interest for Stock, and many more.
Learn more in Publication 525, Taxable and Nontaxable Income
Taxable Income Exemptions
Federal income tax exemptions reduce your taxable income for the year. Each tax exemption is worth $3,650 for the year 2009.
Learn more about income tax exemptions
Standard Deduction to Taxable Income
If you do not itemize deductions on your tax return, you may take the standard tax deduction for your filing status.
Learn more about the standard deduction
Income Limit on Itemized Deductions
Some itemized deductions will be limited if you are married filing jointly and your adjusted gross income is greater than $159,950 ($79,975 if you are married filing separately).
Learn more about itemized deductions
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