Want to Retire Early? Here’s How (or How to Decide If It’s For You), According to Suze Orman and Ramit SethiThere’s a saying that “nothing is certain except for death and taxes.” However, in the case of taxes, if you are in a low-income bracket, you’re not required to file. But how much do you have to make to file taxes? It depends on your age and filing status.
If you’re single and under the age of 65, you don’t need to file if you make $12,200 or less, according to the IRS. If you’re over 65, the amount you can earn before filing increases to $13,850.
If you are married and filing jointly, there are various thresholds before having to file, depending on age.
If you and your spouse are under 65, you can earn up to $24,400. If you are younger than 65 and your spouse is older, that figure increases to $25,700.
And if you and your spouse are both 65 or older, you can make up to $27,000 before the IRS requires filing. If you’re married and filing separately, it’s $5 for all ages.
Other figures for heads of household and qualifying widows and widowers with a dependent child can be found here.
Although the IRS may not require filing below these income thresholds, most people should in case the IRS wishes to question your income, if you are filing for a benefit, or if you wish to amend your tax return, says Bernadette Schopfer, certified public accountant and director of taxation for Maier Markey & Justic LLP in White Plains, New York.
“They should 100 percent file, as long as they can,” says Schopfer. “But if it’s a housebound senior who only gets social security, [it’s not necessary].”
When you file, you trigger a three-year statute of limitations, which means the IRS has just three years “to audit you or inquire about things,” says Schopfer. “Unless I was cheating or really missed the mark on my reporting of my income, [they can investigate after that three-year window]. But if you don’t file a return, the statute of limitations [on a legitimate tax return] never starts running. It’s better to have it run and close.”
There are a variety of free services available to get it done. The IRS Free File provides free tax preparation and filing software.
Additionally, the IRS’s Volunteer Income Tax Assistance (VITA) program provides free tax return preparation for you by volunteers.
“It’s easy enough for you to do,” says Schopfer. “You should just get it done.”