How to Determine If You Need to File a Tax Return with the IRS

Tax season has reached its final stage, and the United States Internal Revenue Service (IRS) is reminding all citizens that filing tax returns is one of their major annual responsibilities. At the same time, paying taxes is also a duty that we should never forget, because if we do not do so, we may have to face fines and penalties in the future.

However, there are some special categories of citizens in the US who are not required to send tax returns to the IRS. This rule does not apply to everyone, but some people may be exempted from it under certain specific circumstances. If you are also among those people, then it is important to know whether you are obliged to file a tax return or not.

Who is not required to send a tax return?

There is no fixed list from the IRS as to which citizens are required to file tax returns. But generally, some people are not required to file a tax return under the following circumstances:

1. Low-income citizens – If your annual income is below a certain limit, you are not required to file a tax return. This limit depends on your age, filing status, and source of income.
2. People receiving only Social Security – If your only source of income is Social Security benefits and you have no other income, you do not need to file a tax return.
3. People listed as dependents – If you are a dependent of another taxpayer and your earnings are limited, you probably do not need to file taxes.
4. Some senior citizens – Some senior citizens whose income is not taxable or who depend only on retirement benefits, are also not required to file a tax return.
5. Self-employed Individuals with Small Benefits – If you are self-employed but your total earnings are less than $400, you do not need to file a tax return.

However, it is important to understand that the circumstances of every case are different. If you are in doubt about this, it is best to consult a tax professional.

Why filing a tax return can be beneficial?

If you fall into the above categories and are not required to file a tax return, experts still recommend that you file your tax return. This is because there can be many benefits of filing a tax return:

1. Opportunity to get a tax refund – If you have paid any type of tax and your income falls in the tax-free category, the IRS can return the money to you in the form of a tax refund.
2. Getting benefits from the government through returns – Many government schemes and exemptions are available only to those who file tax returns.
3. Keeping tax records for the future – If you want to make any financial transactions in the future, such as a home loan or education loan, banks and financial institutions may ask for a copy of the tax return.
4. To avoid any mistake from the IRS – If you do not file a return even though you are eligible, the IRS may wrongly issue a penalty or notice in your name.

Tax filing last date and extension option

According to the IRS, the last date for filing taxes is April 15. If you cannot file the return on time, you can get a 6-month extension (till October) for tax filing. However, this only extends the deadline for tax return filing, not tax payment.

So, if you have to pay tax, it is best to do it on time so that you can avoid any penalty.

Conclusion

Filing tax returns is an important process, and it is essential to ensure that you complete it on time. While some citizens may be exempted from filing tax returns, it is still beneficial in most cases.

If you are in doubt whether you should file a tax return or not, consulting a tax expert is always a wise decision. Also, if you are eligible to receive a tax refund, do not delay and file your tax return as soon as possible so that you can avail yourself of all the benefits.

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