The first step to filing a tax return is determining whether you need to file a tax return altogether. The first question to ask is whether you have self employment income over $400. Any person who earned over $400 in Self Employment income needs to file a tax return and include a Schedule C, regardless of how much other income or wages you earned. The next step is to determine your filing status. However, because the highest possible gross income level that would require a tax return to be filed is $22,700, then any taxpayer who earned over that amount will need to file a tax return regardless of filing status. But for those taxpayers earning under $22,700 then the actual amount of wages earned which would require the need for a tax return will depend on your filing status. See the infographic to determine whether you need to file.
In addition, dependants may need to file a tax return at much lower thresholds. For example, single dependants who are under the age of 65 usually are required to file a tax return if they have passive income over $1,000 or earned income such as salary or wages over $6,200. State threshold may also differ from federal thresholds. It is important to check your state laws when determining if you are required to file a tax return.
In addition, if you received HSA, Archer MSA, or Medicare Advantage distributions, then you are required to file a tax return.
You may also want to file a tax return even if you are not required to do so. One reason to file is to claim a credit or refund. It is important to discuss the possibility of credits and refunds with your tax professional.
Do I need to file a tax return if I live outside the US?
This is a questions we hear a lot and the answer is: YES. Any US citizen or green card holder needs to file a tax return regardless of where they lived. The filing thresholds for US citizens living abroad are the same for those citizens living in the US. While there are credits and exclusion which can reduce or eliminate an expats tax bill, the filing requirement thresholds are the same.