Individual Tax Filing Requirements & Status: Who Must File and Why
Overview: Do you know when you’re required to file a federal income tax return? This guide breaks down the basic income tax formula for individuals, who must file, when to file, key filing statuses, and dependency rules.
✅ Individual Income Tax Formula
- Gross Income: Wages, interest, dividends, state tax refunds, alimony (pre-2019), business income, capital gains/losses, IRA/pensions, rental income, unemployment, Social Security, other.
- Adjustments: Educator expenses, IRA contributions, student loan interest, HSA contributions, self-employment tax, SE health insurance, alimony paid, etc.
- Adjusted Gross Income (AGI) = Gross Income – Adjustments.
- Deductions: Standard deduction or itemized deductions (medical expenses >7.5% AGI, state/local taxes up to $10K, mortgage interest, charity, casualty loss).
- Qualified Business Income (QBI) Deduction: For eligible pass-through income.
- Taxable Income: AGI – Deductions – QBI deduction.
- Federal Tax – Credits – Other Taxes – Payments = Tax Due or Refund.
✅ Who Must File a Return?
- You must file if your income is equal to or greater than your standard deduction + additional amount if 65+ or blind (except MFS).
- File Form 1040 by April 15. You can get an automatic six-month extension to October 15 (Form 4868), but payment is still due by April 15.
✅ Filing Status Options
1️⃣ Single
- Unmarried or legally separated at the end of the year.
2️⃣ Married Filing Jointly (MFJ)
- Married at year-end, living together in recognized common law marriage, or if spouse dies during the year.
3️⃣ Married Filing Separately (MFS)
- Each spouse reports their own income/deductions. In community property states, income is generally split 50/50.
4️⃣ Qualifying Widow(er) with Dependent Child
- Two years after spouse’s death, same tax rates as MFJ.
- Must pay over half the cost of maintaining home for a dependent child who lived with you all year.
5️⃣ Head of Household (HOH)
- Unmarried or considered unmarried (lived apart from spouse last 6 months), not a qualifying widow(er), and must maintain home for a qualifying person more than half the year.
- Dependent parent does not have to live with you.
✅ Dependency Tests
Qualifying Child (CARES)
- Close Relative: Child, stepchild, sibling, or descendant.
- Age Limit: Under 19 (or 24 for full-time students), or any age if permanently disabled.
- Residency: Same principal home more than half the year.
- Support: Child must not provide more than half their own support.
Qualifying Relative (SUPORT)
- Support Test: Taxpayer provides over half the support.
- Under Gross Income: Dependent’s gross income must be below threshold ($4,700 for 2023).
- Precludes Joint Return: Unless for refund only.
- Only Citizens: U.S., Canada, Mexico.
- Relative or Entire Year Household Member: Cousins and foster parents must live with taxpayer all year.
✅ Special Situations
- Multiple Support Agreements: File Form 2120 if two or more taxpayers together provide over 50% support but no one individually does.
- Children of Divorced Parents: Custodial parent claims the child based on time, not divorce decree.
🔗 Helpful References
👉 File right, claim right — and never miss a refund you’re entitled to!
