They say taxes are inevitable. But filing a return can sometimes be avoided. The Internal Revenue Service sets tax-filing income thresholds that are routinely revised. The thresholds vary according to age, filing status and whether you are claimed as a dependent on a taxpayer's return. If your gross income is less than the tax-filing threshold that applies to your circumstances, you do not have to file a return. The thresholds quoted below are current as of tax year 2012.
Under 65 and Not a Dependent
If you are not yet 65 and not claimed as a dependent on anyone's return, your tax-filing threshold is the sum of the IRS standard deduction for your filing status plus the personal exemption amount. For single tax filers, as of 2012, the standard deduction for a single filer is $5,950; the personal or dependent exemption amount is $3,800. The sum of the two is $9,750. If your total income is less than $9,750, you are exempt from filing. The threshold for those under 65 and married and filing jointly is $19,500 as of 2012.
65 or Older and Not a Dependent
The tax-filing thresholds are generally higher for persons 65 and older who are not claimed as dependents on the return of a taxpayer. You must have turned 65 as of the last day of the tax year to take advantage of the higher thresholds. For single seniors, the threshold is $11,200. Married seniors filing jointly must earn less than $21,800 to be able to avoid filing a return. The only filing status for which the 65-and-over threshold is not higher is "married filing separately."
Dependent Under 65
If someone else claims you as a dependent, your income threshold is lower than if you are not claimed. You cannot claim an exemption for yourself if you are being claimed as a dependent by another taxpayer. Moreover, for dependents the source of the income is a factor in determining the threshold.
A dependent under 65 would need earned income of less than $5,800 to escape filing a return. However, if a dependent holds investments that yield more than $950, he must file even if he has no earned income. A married dependent whose spouse files separately and itemizes deductions must file a return with gross income from any source of as little as $5.
Dependent Over 65
A married senior dependent must file a return if she has unearned income greater than $2,100 or earned income of more than $6,950. A single senior dependent can avoid filing if she has unearned income of $2,400 or less, or earned income of $7,250 or less. If your spouse files separately and itemizes his deductions, you have to file a return with gross income of $5 from whatever source.
Self-Employment Tax Requirement
If you are in business for yourself -- as an actor or model, for example -- and earn at least $400, you are liable for self-employment tax and therefore must file a return. This is true even if you are a minor, in which case your parent must file and sign the return on your behalf. It also holds whether you are claimed as a dependent or not.
