A person is required to file an income tax return with the IRS if the person's income is more than a certain amount. To determine whether a person needs to file a tax return, we can turn to tables found in Publication 17, Your Federal Income Tax. Publication 17 contains three tables of filing requirements: one for independent taxpayers, another for dependents, and a third for other situations when a tax return is required.

What's involved is a simple process of gathering facts and then using those facts to look up information in the filing requirement tables. Even if a person is not required to file a return, it may be beneficial to file anyway. The filing requirement tables are provided for the year 2014, and we take a brief look at what the numbers in these tables mean.

What's new with filing requirements

New for the year 2014, someone will need to file a tax return if they received any advance payments of the premium tax credit. This is true even if the person's gross income falls below the threshold amounts shown in the tables below. Notice that the IRS has added this as a fifth condition in Table 3 (see below).

What you need to know to determine if you are required to file

We need to know four things to use the filing requirement tables.

(1) Whether a person is a dependent or independent.

(2) What a person's filing status is.

(3) The person's age, and

(4) the person's gross income.

Gross income means "all income you receive in the form of money, goods, property, and services that is not exempt from tax," says the IRS in Publication 501.

How to use the tables to determine filing requirements

Once we have this information ready, we take a two-step process to determine if a person is required to file a tax return.

Process for independent taxpayers

Step 1. Use Table 1 to look up information.

Step 2. Determine if a person's gross income equals or exceeds the amount shown in Table 1 based on the person's filing status and age.

Possible outcomes:

• If gross income does equal or exceed the amount shown, then the person is required to file a tax return.
• If gross income is less than the amount shown, then look at the situations described in Table 3. If one or more of those situations applies to you, then you are required to file.

Process for dependent taxpayers

Step 1. Use Table 2 to look up information.

Step 2. Determine if a person's gross income equals or exceeds the amount shown in Table 2 based on the person's filing status and age.

Possible outcomes:

• If gross income does equal or exceed the amount shown, then the person is required to file a tax return.
• If gross income is less than the amount shown, then look at the situations described in Table 3. If one or more of those situations applies to you, then you are required to file.

Now let's take a look at the various filing requirement tables. These tables are published by the Internal Revenue Service in Publication 17 and in Publication 501. These are updated each year. These are the tables for the year 2014.

Table 1. 2014 Filing Requirements for Independent Taxpayers
(Adapted from Table 1-1 in Publication 17 (2014), page 6, pdf)

If your filing status is...	And at the end of 2014 you were...	Then file a return if your gross income was at least...
Single	under 65	$10,150
	65 or older	$11,700
Married filing jointly	under 65 (both spouses)	$20,300
	65 or older (one spouse)	$21,500
	65 or older (both spouses)	$22,700
Married filing separately	any age	$3,950
Head of household	under 65	$13,050
	65 or older	$14,600
Qualifying widow(er) with dependent child	under 65	$16,350
	65 or older	$17,550

 

Table 2. 2014 Filing Requirements for Dependents
(Adapted from Table 1-2 in Publication 17 (2014), page 7, pdf)

Single Dependents -- Were you either age 65 or older or blind?
?	No.	You must file a return if any of the following apply:
		Your unearned income was more than $1,000.
		Your earned income was more than $6,200.
		Your gross income was more than the larger of: $1,000, or Your earned income (up to $5,850) plus $350.
?	Yes.	You must file a return if any of the following apply.
		Your unearned income was more than $2,550 ($4,100 if 65 or older and blind).
		Your earned income was more than $7,750 ($9,300 if 65 or older and blind).
		Your gross income was more than the larger of: $2,550 ($4,100 if 65 or older and blind), or Your earned income (up to $5,850) plus $1,900 ($3,450 if 65 or older and blind).
Married dependents--Were you either age 65 or older or blind?
?	No.	You must file a return if any of the following apply.
		Your unearned income was more than $1,000.
		Your earned income was more than $6,200.
		Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
		Your gross income was more than the larger of: $1,000, or Your earned income (up to $5,850) plus $350.
?	Yes.	You must file a return if any of the following apply.
		Your unearned income was more than $2,200 ($3,400 if 65 or older and blind).
		Your earned income was more than $7,400 ($8,600 if 65 or older and blind).
		Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
		Your gross income was more than the larger of: $2,200 ($3,400 if 65 or older and blind), or Your earned income (up to $5,850) plus $1,550 ($2,750 if 65 or older and blind).

 

Table 3. Other Situations When You Must File a 2014 Return
(Adapted from Table 1-3 in Publication 17 (2014), page 8, pdf)

You must file a return if any of the five conditions below apply for 2014.
1.	You owe any special taxes, including any of the following.
	a.	Alternative minimum tax.
	b.	Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. But if you are filing a return only because you owe this tax, you can file Form 5329 by itself.
	c.	Household employment taxes. But if you are filing a return only because you owe this tax, you can file Schedule H by itself.
	d.	Social security and Medicare tax on tips you did not report to your employer or on wages you received from an employer who did not withhold these taxes.
	e.	Recapture of first-time homebuyer credit.
	f.	Write-in taxes, including uncollected social security and Medicare or RRTA tax on tips you reported to your employer or on group-term life insurance and additional taxes on health savings accounts.
	g.	Recapture taxes.
2.	You (or your spouse, if filing jointly) received HSA, Archer MSA, or Medicare Advantage MSA distributions.
3.	You had net earnings from self-employment of at least $400.
4.	You had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes.
5.	Advance payments of the premium tax credit were made for you, your spouse, or a dependent who enrolled in coverage through the Health Insurance Marketplace. You should have received Form(s) 1095-A showing the amount of the advance payments, if any.

What do these filing requirement numbers mean?

The filing requirement numbers are the sum of a taxpayer's standard deduction and personal exemption amounts. Let's look at one example. In Table 1, a single person under the age of 65 has a filing requirement of $10,150 for the year 2014. A single person has a standard deduction of $6,200 and would be eligible for at least one personal exemption of $3,950. Together, these two numbers add up to $10,150. And that's the same as the filing requirement amount. See that?

So, the amount of the standard deduction varies based on a person's filing status. And people age 65 or older and blind persons have an additional standard deduction on top of their regular standard deduction. Because of these different standard deduction amounts, the filing requirement amounts differ.

In other words, the filing requirement figure represents the minimum amount of deductions a person might have based on their tax situation. A person's tax liability (the amount required to be paid in federal tax to the IRS) is based on taxable income. Taxable income is a person's gross income minus any deductions. In other words, there is usually no federal income tax if a person's taxable income is less than the sum of the person's standard deduction and personal exemption. I say, "usually," because there are situations in which a person's income could be below the filing requirement and yet there's still a tax liability. These situations are described in Table 3.

The filing requirement numbers change each year because the standard deduction and personal exemption amounts change each year. Those amounts are adjusted annually based on changes in inflation.

To make a general observation, the filing requirement tables attempt to discern whether a person might have a tax liability greater than zero. If so, the person is required to file a tax return.

When might it be beneficial to file a return even if, strictly speaking, a person isn't required to file?

Even if a person is not required to file a tax return, it might be beneficial to file a return anyway. What we're looking at is whether the person would receive a tax refund or whether there's some other benefit that would come from filing a return.

If a person had tax withheld from their income (such as withholding on wages or retirement plan distributions), that person would have overpaid their tax. That's because their income is below the filing requirement, and so the person would not have a tax liability. In this case, the tax withholding can be refunded. However, the IRS will issue refunds only if a person files a tax return.

Also, if a person is eligible for one or more refundable tax credits, that could generate a refund from the government. Examples of refundable credits are the earned income credit, child tax credit or American Opportunity credit. Again, a person would need to file a return in order to calculate these credits and request a refund from the IRS.

Finally, a person might want to file a tax return for reasons other than to get a refund. The most common example I've seen of this are people who "just want to be on the safe side" and feel uncomfortable not filing a return. That's a totally acceptable reason for filing a return. Here's why. The IRS has certain time limits for issuing tax refunds, for conducting an audit or for collecting taxes the IRS thinks a person might owe. These time limits are called the statute of limitations. In general, the IRS has three years from the date a tax return was filed to begin an audit and ten years from the date a tax return was filed to collect tax. If a return isn't filed, those time limits never begin, which can potentially leave a person exposed to audit or collection actions. Filing a return starts the clock ticking on these statutes of limitations.

Another example is people who have been (or might be) victims of identity theft. In this situation, a person will want to file a return, even if their income is below the filing requirement, in order to put the IRS on notice what the person's true income is for the year and to prevent the possibility that a thief files a fake tax return using the taxpayer's name and Social Security number.

More information about filing requirements:

• Publication 17, Your Federal Income Tax, chapter 1
• Similar information is found in Publication 501, Exemptions, Standard Deduction, and Filing Information