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What is the minimum income level required to file taxes?

Like any other question related to taxes, this question has many caveats and conditions that depend on your specific situation. For example, even if you had no income in 2021, you may still need to file taxes to report particular factors to the IRS. If you are in a hurry to find out whether you still need to file in 2022, you can use the IRS’ Interactive Tax Assistant. This online questionnaire takes 10-15 minutes to complete and walks you through a series of questions that help you figure out whether you need to file a federal income tax return. Before starting the questionnaire, you’ll need to know your filing status, the amount of income tax withheld, and your 2021 gross income.

Many taxpayers become confused when learning that they’ll need to file a tax return, despite receiving little or no income in 2021. Well, the main reason you’d file in this scenario would be to report advanced tax credits, unearned income, or to pay tax on the income you did receive in 2021.  Here are several circumstances that would require you to file a tax return:

  • You received unemployment income (more on this below)
  • You had taxes withheld from your pension or wages for the 2021 tax year and would like a refund.
  • You have unreported tip income with owed Social Security and Medicare taxes.
  • You received an advanced Premium Tax Credit payment during 2021.
  • You received a stimulus payment as part of the American Rescue Plan.

When it comes to unemployment benefits, it’s worth noting a few changes that impact how you’ll file in 2022. 

Now, if you received unemployment benefits in 2020, you may have received benefits in January 2021. If so, you’ll need to include this income on your 2021 tax return, even though you actually received this money for a 2020 period. If you collected unemployment in 2021, you will receive a Form 1099-G from either the state or your unemployment benefits payor. The Form 1099-G is for informational purposes and does not need to be filed with your 2021 tax return.

Author’s Note: This excerpt was originally featured as our contribution to Porch.com’s tax expert roundup here.

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