How Much Practice You Have to Make to Owe Taxes?

If you're non a dependent, here's a cheat sheet for you. If your gross income is equal to or more than what's listed in the table below, based on 2019 requirements, you'd need to file a taxation return. (You can use the I.R.South.'s interactive tool to notice out if yous should file taxes. For state filings, TurboTax offers a list of states' requirements; but, by and large, if y'all file a federal render, you should also file a state return.)

Filing Status

Under Historic period 65

Age 65 and Older

Single

$12,200

$thirteen,850

Married, filing jointly

If both spouses are under age 65: $24,400

If one spouse is 65+: $25,700

If both spouses are 65+: $27,000

Married, filing separately

$v

$5

Head of Household

$18,350

$20,000

Qualifying Widow(er)

$24,400

$25,700

The thresholds for dependents are based on the amount of your earned income, unearned income and gross income, as well as whether you're married or unmarried and blind or non. Annotation, likewise, that at that place are a number of special situations—other than being a dependent—that may require y'all to file a return, even if your income is less than the minimums. For case, if you're self-employed and make just $400 or more, y'all have to file taxes.

You can use the Interactive Tax Assistant tool at world wide web.irs.gov to figure out if you're in one of those special situations and whether y'all demand to file a return. Yous just have to answer a bunch of questions—mainly near your relationship and income—all of which the site estimates will take 12 minutes to answer.

Back up. What exactly is gross income?

It'due south all the money yous've made in the tax year. For most people, that mainly includes earned income from your salary, wages, tips or bonuses. It as well includes unearned income, like dividends and accrued interest, as well as any gambling winnings. It does not include revenue enhancement-exempt income, such as kid support payments, virtually alimony payments, workers' comp, and more.

Gross income should not be dislocated with your adapted gross income (AGI) or your taxable income. You tin can decide your AGI by taking your gross income and subtracting certain deductions, including contributions to a traditional IRA, 401(k) and other qualified retirement plans, interest paid on educatee loans and contributions to a wellness savings account. Taxable income is your AGI minus your standard deduction or any itemized deductions you claim. (You lot cannot claim both the standard and itemized deductions. Post-tax reform, most people are better off taking the standard deduction, which for the 2019 filing year goes up to $12,200 for single filers and $24,400 for articulation filers.)

And so if my gross income falls below those minimums, I don't have to file a tax return? Correct. But it might be a good thought to file anyway. That's because you may authorize for certain tax credits and get a trivial actress cash from Uncle Sam, even if you owe nada.

What revenue enhancement credits are available to me?

If you owe picayune to no taxes, you should focus on tax credits that are refundable. That means yous'll be able to cash them in fifty-fifty if they're greater than what you lot owe. Most tax credits are not-refundable, meaning they can reduce your tax bill, only won't pay you lot anything actress. And then, if you lot owe $300 in taxes, and y'all score a revenue enhancement credit worth $500, if it's refundable, you tin can pocket the $200 deviation, whereas if it's non-refundable, you'd just wipe away your $300 bill and call it a 24-hour interval.

One refundable credit you should see if yous're eligible for is the Earned Income Taxation Credit (EITC), meant to benefit workers with low to moderate income. In full general, you can claim it every bit long your total earned income is at least $1 and your AGI is less than specified limits, which depend on your filing condition and how many qualifying children you claim on your render. For 2019, those limits range from $fifteen,570 if you're unmarried with no kids to $55,952 if you're filing jointly and take three or more kids. As well, your investment income must be $iii,600 or less for the year. And the corresponding maximum amounts you tin can become with the EITC range from $529 to $6,557. For the 2018 tax year, 25 1000000 eligible taxpayers claimed the EITC, collecting an average $2,488 credit.

A partly refundable option is the Child Revenue enhancement Credit (CTC), worth upward to $2,000 per qualifying child under age 17. The credit amount is reduced for single filers with a modified AGI (that's your AGI plus certain deductions including pupil loan interest, half your self-employment tax and IRA contributions) of $200,000, or $400,000 for married couples filing jointly. And up to $1,400 of that credit per child is refundable.

The American Opportunity Tax Credit (AOTC) is also partly refundable. Information technology'southward worth up to $two,500 a twelvemonth for each eligible student, and 40 percent of it—up to $1,000—can be refunded to you. To claim the full credit, your MAGI must be $fourscore,000 or less, if you lot're a unmarried filer (or $160,000 or less, if you're filing jointly), and to merits it at all, information technology must be $90,000 or less (or $180,000 or less for joint filers).

Exercise I have to claim the credits?

No, you lot never have to have advantage of tax breaks, but why wouldn't you? Yes, filing taxes can be an intimidating hassle. But it can exist well worth information technology. And taking advantage of any available tax breaks while minimizing your revenue enhancement nib is a smart way to requite yourself a financial boost.

Acorns does not provide legal or taxation advice. Delight consult your tax and/or legal counsel for specific tax or legal questions and concerns.