Personal Finance

Will You Have to File a 2017 Tax Return?

Tax form under a calculator and pen, with word Audit stamped in red letters on a piece of paper nearby.

2018 is here, and it's almost time to start thinking about your taxes. As much fun as preparing your return can be, millions of Americans aren't required to file a tax return. It's important to look closely at the rules to make sure that you qualify not to file, and you also need to be aware that some favorable provisions might make it worth your while to file even if you technically don't have to.

Here's who has to file

The rules governing return filing use a set of guidelines that include your income, filing status, age, and dependent status. The chart below shows the maximum amount of gross income you can have without needing to file a return.

Filing Status Age Maximum Gross Income Without Filing 2017 Tax Return
Single Under 65 $10,400
65 or older $11,950
Married Filing Jointly Under 65 (both spouses) $20,800
65 or older (one spouse) $22,050
65 or older (both spouses) $23,300
Married Filing Separately All ages $4,050
Head of Household Under 65 $13,400
65 or older $14,950
Qualifying Widower Under 65 $16,750
65 or older $18,000

Data source: IRS.

In general, the amount above is what you get when you combine your standard deduction with the number of personal exemptions for that filing status assuming no additional dependents.

However, if someone can claim you as a dependent, different rules apply. In that case, you'll have to file if your earned income was more than $6,350. Those with total gross income of $1,050 or more also have to file if more than $350 of that amount came from sources other than earned income, as do those with $1,050 in investment income or other unearned income. Dependents who are 65 or older have somewhat higher income limits that incorporate the higher standard deductions that such individuals receive.

Other cases when you'll need to file

More broadly, certain special situations come up that require tax filing even if you would otherwise be exempt under the income limitations. Those who owe household employment taxes on domestic employees that they hire have to file returns, as do those who earn more than $400 from self-employment or owe alternative minimum tax. Recipients of distributions from tax-favored accounts like health savings accounts or medical savings accounts are also typically required to file, as do people who work in professions in which they receive tips and have to pay payroll taxes on them.

Tax form under a calculator and pen, with word Audit stamped in red letters on a piece of paper nearby.

Image source: Getty Images.

When you ought to file even if you don't have to

For many taxpayers, filing is a good idea regardless of income limitations. For instance, if you expect a refund because you've had too much money withheld from your paycheck, then filing a return is the only way to get it back. Refundable tax credits , such as the earned income credit, additional child tax credit, American Opportunity education credit, or certain other less commonly claimed tax breaks give you the chance to get money back from the IRS even if you don't otherwise owe taxes. These credits can amount to thousands of dollars, making it worthwhile to go through the exercise of preparing a return.

Another reason to file is that it starts the clock under which the IRS can audit your taxes for the given year. In most cases, you face the potential for review for three years after the due date of the return in question. However, those who file later than that face a three-year limit after their filing date, and theoretically, those who don't file never have complete closure.

It takes time and effort to do your taxes, so it's easy to understand the appeal of not having to file. Yet even if you qualify not to file, don't miss out on money that you're entitled to receive just because you don't want to deal with preparing a return.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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