Tax Season 2022: Who Needs To File A Tax Return? (2023)

Each year, the IRS processes roughly 150 million individual tax returns. Yours may be one of them—if you have to file a tax return.

Not everyone has to file a tax return, and whether you need to file depends on your age, filing status, income level, and the source of that income.

Here’s what you need to know about filing a federal tax return in 2022 and why you might want to file a return even if the IRS doesn’t require it.

Who Needs to File a Federal Tax Return for the 2022 Tax Season?

Yearly, the IRS publishes a table with the filing requirements for people who aren’t claimed as a dependent on someone else’s return. Here are those numbers from the Draft 2021 Form 1040 Instructions:

If your 2021 gross income exceeds the amount shown in the table above, you must file a federal income tax return. The IRS defines gross income as all income you receive in the form of money, goods, property and services, including income from outside the U.S., sale of stock, a business, and the sale of your home, even if the gain isn’t taxable.

There are also a few situations in which you must file a tax return even if you don’t meet the income requirements outlined above, including,

• You owe special taxes, such as the alternative minimum tax, a penalty from an early withdrawal from an IRA or 401(k), household employment taxes, Social Security or Medicare taxes on tips
• You (or your spouse) withdrew money from a health savings account
• You had net earnings from self-employment of at least $400

You can review the full list of situations in which you must file a tax return no matter your income level in Chart C (Page 12) of the IRS Form 1040 Instructions.

Filing Requirements for Dependents

The IRS has different tax filing requirements for people claimed as dependents on another person’s return. For dependents, filing status and age are factors, but so is the type of income received, whether earned or unearned.

• Earned income includes salaries, wages, tips, professional fees, and taxable scholarships and fellowship grants.
• Unearned income includes taxable interest, ordinary dividends, capital gain distributions, unemployment compensation, taxable social security benefits, pensions, annuities, and distributions from a trust.

Read more: Your Social Security May Be Taxable. Here’s What You Need To Know

Here are the minimum income limits from the Draft 2021 Form 1040 Instructions:

Dependent children can avoid filing a tax return if they have only interest and dividend income and a parent elects to report the child’s income on their own return. To make this election, you have to meet all of the following requirements:

• The dependent child is under age 19 (or under age 24 and a full-time student) at the end of the year
• The child’s income consisted only of interest, dividends, and capital gain distributions
• Their interest and dividend income was less than $11,000
• The child doesn’t file a joint return with a spouse
• The child didn’t make estimated tax payments, have federal income tax withheld, or have an overpayment applied from a prior-year tax return
• You, your spouse, or dependent received an advance payment of the premium tax credit when you purchased health insurance coverage via HealthCare.gov.

If you meet all the requirements outlined above, you’ll report the child’s income on Form 8814 and file it with your Form 1040.

Why You Might Want to File a Federal Income Tax Return Anyway

You might not be required to file a tax return in some cases, but it could be beneficial to file one anyway. Here are some situations where that could be the case:

You Can Get a Refund of Withheld or Estimated Taxes

If your employer withheld federal income taxes from your pay or you made estimated tax payments, filing a tax return may allow you to receive some or all of those overpayments back in the form of a tax refund.

Keep in mind, if you regularly file a tax return just to get a refund of the tax your employer withheld, you might want to decrease your withholding.

File a new Form W-4 with your employer to reduce your withholding and increase your take-home pay, and you won’t have to worry about filing a return unnecessarily.

You Can Claim Refundable Tax Credits

Refundable tax credits are particularly valuable for low-income taxpayers because they can provide a refund beyond what you paid for the year via withholding or estimated tax payments.

In other words, if it’s worth more than the tax you owe, the IRS will issue you a refund for the difference. Refundable credits include:

• Earned Income Tax Credit (EITC). The EITC is a tax credit for lower-income working people. For 2021, it’s worth up to $6,728, but you must meet strict income limits and other requirements to qualify. The income limits change each year and depend on your filing status and how many dependents you can claim. You can’t claim the credit if you have more than $10,000 of investment income. Review the IRS’s table of maximum adjusted gross income (AGI) amounts and credit amounts for 2021 to learn more.
• Child Tax Credit (CTC). The CTC is designed to help low- and moderate-income families offset the cost of raising kids. For 2021, it’s worth up to $3,600 for each child under age six and up to $3,000 per child age six through 17.
• Recovery Rebate Credit. If you didn’t receive a third Economic Impact Payment, also known as a stimulus payment, or didn’t get the full amount, you may be able to take it as a tax credit on your 2021 tax return. The third stimulus check, which the IRS started sending out in March 2021, was actually an advance payment of a 2021 tax credit.
• American Opportunity Tax Credit (AOTC). The AOTC helps offset higher education costs for full-time students in their first four years of college. It’s worth up to $2,500 per qualifying student, and up to $1,000 of the credit is refundable.

You Can Start the Clock on the Statute of Limitations

The IRS generally has three years from the date you filed to audit your tax return—six years if your return includes a “substantial understatement” of income. But if you don’t file a tax return, the clock on that statute of limitations never starts running. In effect, the IRS could come after you in a decade or more and claim that you should have filed a return.

If you’re worried about an IRS audit, you may want to file a tax return even if you didn’t earn enough to trigger a filing requirement.

Don’t Forget About State Returns

The filing requirements outlined above apply to federal income tax returns, but if you live in a state with a state-level income tax, you may also need to file there.

Filing requirements vary by state, so check with a tax professional or your state’s tax agency to figure out whether you need to file a state return.