Ask Raisin: Do I Need To File a Tax Return?

Filing a tax return is one of your fundamental responsibilities as an American citizen. However, not every citizen must file a state and federal tax return every year. Your income, filing status, and employment situation all play a role.

In this guide, we’ll explain the factors that determine whether or not you need to file a tax return this year. Plus, we’ll discuss exactly why filing your taxes is necessary and share how to do it.

Continue reading to ensure you submit your federal and state returns correctly and on time.

Each year, the IRS determines annual filing thresholds. If your gross income meets or exceeds the limits set by the IRS, you must file federal taxes.

There are seven income tax rates, which are determined based on the following factors:

• Your filing status (single, married filing jointly, head of household, etc.)
• Your age
• Whether you are claimed as a dependent on someone else’s return

For example, in the 2024 tax year, if you're single and under 65, you must file if your income is at least $13,850. We recommend checking the IRS website for the most up-to-date information. They will provide clear information regarding thresholds for each age range and filing status.

Likewise, you must file a tax return if the following applies to you:

• You have had taxes withheld from your paycheck and want a refund
• You have received healthcare premium tax credits
• You owe additional taxes on investment income
• You need to report social security or other benefits
• You earned more than $108.28 as a church employee

Individuals who are claimed as dependents may have to file federal income taxes.

There are different income thresholds for dependents based on earned versus unearned income. If you meet or exceed the income threshold for your age group and filing status, you will have to file taxes. Likewise, filing is required if you make $1,250 or more in unearned income (interest, dividends, capital gains).

If you owe any taxes, you must file regardless of your income threshold.

Self-employed individuals who make more than $400 of income must file a tax return. The federal income tax thresholds do not apply to freelancers or self-employed individuals.

Some states do not have a state income tax, including:

• Texas
• Florida
• Washington
• Alaska
• South Dakota
• Nevada
• Wyoming

In all other states, you may need to file a state tax return. States generally have different filing thresholds than the federal government, however.

Likewise, your residency status may impact filing requirements. For example, if you move mid-year, you may be responsible for part-year resident tax returns in both states.

If you live in one state and work in another, you will need to file a non-resident tax return in the state where you work. However, some neighboring states have reciprocity agreements. These allow residents to pay taxes only in their home state. You may need to submit a withholding exemption form to your employer to take advantage.

In states without reciprocity agreements, you will likely need to file in both states.

Check with your state’s tax agency to determine whether or not you need to file.

All residents must file their tax return by April 15th of the next year, also known as Tax Day. If the 15th falls on a weekend or holiday, Tax Day will be the next business day.

If you are unable to meet the deadline, you can request an automatic six-month extension from the IRS. In such cases, your amended tax deadline will be October 15th of the same year.

Even with an extension, any owed taxes must still be paid by the original deadline to avoid penalties.

The IRS enforces tax compliance. While filing taxes can be stressful and time-consuming, there are many benefits:

• You might receive a refund. It’s common to overpay taxes through payroll withholding. If you file correctly, you may receive your money back in the form of a tax refund.
• You can claim tax credits. You can only receive tax credits owed to you if you file your taxes and claim them. For example, parents of children can claim a child tax credit. That’s worth up to $2,000 per qualifying child.
• It contributes to your social security benefits. For self-employed individuals, reported earnings impact social security payouts in the future.

Additionally, filing your taxes on time ensures you avoid costly penalties and do not accrue interest.

First, you’ll need to gather the necessary tax paperwork. Your employer is required to provide you with the documents you need by January 31st of the following tax year. Be aware that documents postmarked January 31st may arrive several days late. To avoid delays, some employers may provide this documentation digitally.

Once you have the correct documents, there are several valid methods for filing your tax returns, including:

• IRS Free File
• Tax preparation software
• Hiring a tax professional

You can submit your tax preparations either electronically or by mail. E-filing tends to be faster and more secure, potentially allowing you to receive your tax refund sooner. If you file online, you can use the “Where’s my Refund?” tool from the IRS to track your status.

Learn more about taxes and how taxation works with Raisin's Tax Guides.

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.