The Maximum Amount of Money Allowed to Make Without Filing Taxes
Staying in compliance with IRS rules and guidelines can be difficult, but the first step begins with determining whether your income even meets the requirement to file a return. If you fail to file when you're required to, you could be subject to a variety of IRS penalties for your negligence. Thankfully, the filing requirements are relatively straightforward and easy to understand.
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General Filing Limit
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The income filing limit corresponds to your filing status. So before you can know whether you're required to file a return, you must first select the most appropriate filing status for your circumstances. Married filing jointly and separate are the two choices available to married filers, while single are head of household are the choices available for single filers. You are considered married if you are married on the last day of the tax year. Additionally, the head of household filing status is usually designated for taxpayers who have at least one dependent and provide the majority of support for the household. For tax year 2010, filers under 65 are required to file a return if they are single and earn at least $9,350, $12,050 if head of household, $18,700 if married filing jointly, $3,650 if married filing separate and $15,050 for qualifying widow or widower.
Limits for Seniors
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For tax year 2010, filers over age 65 are allowed a slightly higher filing limit than most taxpayers. Elderly filers are not required to file unless an income tax return their gross income is at least $10,750 if single, $13,450 if head of household, $20,900 if married filing jointly or $16,150 for qualifying widow or widower. The income limit for married filing separate filers -- $3650 -- is the same for taxpayers of any age.
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Limits for Dependents
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A dependent is anyone who is eligible to be claimed on the tax return of another person. The income filing limits are different for dependents than for ordinary taxpayers. Single dependents are required to file a return if their unearned income was over $950, their earned income was over $5,700, or their gross income was the larger of a) $950 or b) your earned income (up to $5,400) plus $300.
Considerations
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Even if you're not required to file an income tax return, it may be in your best interest to file if you are eligible for a refundable tax credit or if federal tax was withheld from your pay during the tax year. Unlike nonrefundable credits, which only reduce your tax liability, refundable credits reduce your tax liability and refund any additional amount to you in the form of a refund. Examples of refundable credits include the earned income credit, the additional child tax credit, the making work pay credit and beginning in tax year 2010, the adoption credit.
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