Income Limits

• For tax year 2010, taxpayers who are under 65 file a tax return if they single and earn at least $9,350, $12,050 for head of household, $18,700 for married filing jointly, $3,650 for married filing separately and $15,050 for qualifying widow or widower.
  
  

Elderly Taxpayers

• For tax year 2010, filers over 65 are allowed a slightly higher filing limit than ordinary taxpayers. Elderly taxpayers are not required to file unless their gross income is at least $10,750 for single, $13,450 for head of household, $20,900 for married filing jointly, or $16,150 for qualifying widow or widower. The income limit for married filing separately filers, $3,650, is the same for taxpayers of any age.
  
  

Dependents

• Generally, you cannot be claimed as a dependent if you earned more than $3,650 unless you are a qualifying child. To be a qualifying child, the child must have lived with you for at least half the year, be under age 19 (or 24 if enrolled in school), must not have filed a joint return and must be the child, stepchild, brother, sister, stepbrother, stepsister, foster child, adopted child or a descendant of one of these persons. Dependents must file their own returns if your unearned income was over $950, and your earned income was over $5,700. Dependents who are over 65 and are dependents of another taxpayer must file a return if their unearned income is over $2,350 or their earned income is over $7,100.
  
  

Warning

• If you are required to file a return and fail to do so, the IRS may file a substitute return on your behalf. If the IRS files for you, it will not grant you any of the credits, deductions, or exemptions for which you may be eligible, thus resulting in a higher tax liability. Penalties and interest will be added to any amount you owe as a result of a substitute return. The failure to file penalty is 5 percent of any tax owed for as long as the tax remains unpaid and the failure to pay penalty is ½ of 1 percent of the unpaid tax. If there is no tax owed as a result of the return, then the IRS will not assess you a penalty, however you will lose any refund that results from the return if you file it later than three years from the due date.