The Internal Revenue Service taxes most types of income, but it offers several deductions to offset or reduce the tax you owe. The main reduction to taxable income that is available to everyone is the standard deduction. This deduction amount depends on your filing status and age, but if you earn less than the standard deduction, you won’t have to file in most cases. Even if you aren’t required to file, you may still choose to do so if you qualify for certain credits. This could give you a refund even if you don’t owe any tax.
Get a copy of the 1040 instructions for the year you’re filing a return. These instructions are available free on the irs.gov website. The IRS usually posts instructions for the upcoming season in November or December, but you can view 1040 instructions for the current and most previous years at any time.
Calculate your estimated taxable income. This includes income from any source that is subject to tax. Common types of taxable income include earnings from wages, net self-employment profits, net rental income profits, unemployment compensation and interest income.
Look at the “Filing Requirements” chart. This is located within the first few pages of the instruction booklet.
Find your filing status on the chart to see the taxable income limit for your status. The IRS allows different allowances for each status, so people who file under some statuses may be allowed to earn more without having to file than people who use other statuses. If your income is above the amount listed, you must file a return – even if you owe no tax. If your taxable income is below the amount listed, you don’t have to file.
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