Author: Bright Shire
Since the tax season in the United States is fast approaching, you need to be aware if you are required to file a federal tax return because not everyone is.
Well, there are standard deduction thresholds that work as effective determiners of who is needed to pay federal income tax on their earnings.
Now that the pandemic-era tax relief initiatives are gone, and the usual duties regarding tax filing are back to normal, it is about time to check out your status.
According to the rules in tax filing, low earners are not obliged to pay taxes since their total earnings are less than the standard deduction amount.
The term ‘standard deduction’ is regarded as the earnings threshold in which those who are earning below can have a reduced tax bill or will not have to pay taxes at all. So, let’s check to see if you are required to pay tax on your income or not. Keep reading below.
The Standard Deduction Thresholds
As for 2023, the IRS has upped the standard deduction thresholds significantly. This change indicates that low-income earners will not be required to pay federal income tax:
- Single; or Married and filing separately and earning $13,850
- Married filing jointly and surviving spouses and are earning $27,700
- Head of household and earning $20,800
If you are not earning above those thresholds, you will not be required to declare U.S. taxes in 2023. Yet, it is a must-know that you might need to join some federal financial relief programs to claim the support.
Additional Standard Deduction
Besides the standard deduction thresholds, additional standard deduction thresholds exist. Under these thresholds, some earners are eligible for a slightly increased standard deduction. This means that they can enjoy a reduced tax obligation.
They can even entirely avoid paying federal income taxes. Primarily, earners who can claim these additional standard deduction thresholds include those who are registered as blind or are aged 65 or older.
Moreover, this amount is added to the regular standard deduction, which effectively increases the threshold for eligible taxpayers:
Married Filing Jointly or Married Filing Separately
- Either 65 or older or blind – $1,500
- Both 65 or older and blind – $3,000
Single or Head of Household
- Either 65 or older or blind – $1,850
- Both 65 or older and blind – $3,700
Rules when receiving Social Security benefits
When it comes to receiving Social Security benefits, it means that you wouldn’t have any taxable income and wouldn’t need to file a tax return.
Yet, there’s a catch that you need to know regarding receiving it. If you are married but choose to file a separate tax return from your spouse, you are required to include at least some of the Social Security benefits you received in your taxable income. The primary purpose of that is to see if it is greater than your standard deduction. If greater, you would need to file a return.
What to know if you want to submit a tax return in order to claim a tax refund
Technically, the IRS doesn’t automatically issue refunds without a tax return. With that said, you must file a tax return if you want to claim a tax refund. This might confuse you because there are years when you might not be required to file a tax return. But if you have money withheld for federal tax, you are entitled to a refund if you have earned less than the standard deduction.
The easy way to know if you don’t have to pay federal income tax is by knowing if you earned below the standard deduction. If you know that you are a low-income earner, you have a great chance to be exempted. Don’t miss out on the chance to be a responsible citizen and probably a taxpayer. Always consider your gross income thresholds to see your status.