Did you know not everyone has to file a tax return? Here are the details on who is required to file a federal income tax return—plus, the possible penalties for those who are required to but don't. Keep in mind your state and local tax requirements may vary, so be sure to double check these with the appropriate agency.
Do you have to file taxes?
You're required to file a federal income tax return if you are a citizen or legal resident of the US and meet certain requirements related to gross income, filing status, age, and whether someone claims you as a dependent on their own tax return. If you're claimed as a dependent on someone else's return, you typically won't need to file unless you earn more than the dependent income thresholds.
You can use the IRS's online tool to help you figure out if you need to file a federal tax return, or review the chart below. (Pro tip: Gross income means your total income from all sources for the year. You can't lower it with deductions, such as retirement contributions.)
|If your filing status is…
|AND at the end of 2023 you were…
|THEN file a return if your gross income was at least…
|65 or older
|head of household
|65 or older
|married filing jointly
|under 65 (both spouses)
|65 or older (one spouse)
|65 or older (both spouses)
|married filing separately
|qualifying surviving spouse
|65 or older
|Source: IRS, 2023 Filing Requirements Chart for Most Taxpayers (Publication 501)
What happens if you don't file taxes?
Exactly what happens if you don't file your federal tax return depends on whether you have a tax bill or not.
If you owe taxes
If you owe taxes, not filing a tax return can be expensive. You may face 2 different penalties—for failure to file and failure to pay—and rack up interest based on the amount of taxes you haven't paid.
The failure-to-file penalty charges you 5% of your unpaid taxes and is assessed monthly for up to 5 months before maxing out. The penalty won't exceed 25% of your unpaid taxes. If it takes you more than 60 days to file your return, the minimum you'll pay for this penalty becomes the lesser of $485 or 100% of the tax you owe. Learn more about what happens if you fail to file.
The failure-to-pay penalty equals 0.5% of your overdue taxes and is assessed monthly until it totals 25% of the unpaid balance. If you are charged both penalties for a month, the failure-to-file penalty is reduced by 0.5% so that your total penalty is 5%. Learn more about what happens if you fail to pay your penalty.
In addition to the penalties, interest can accrue daily on your unpaid tax balance. The exact rate changes quarterly but is set as the federal short-term rate plus 3%. Unpaid penalties may be charged interest in addition to interest that balances accrue.
If you don’t respond to IRS notices about your overdue taxes by paying your debt or filling out other forms to request payment plans or approved delays, the IRS may raise penalty rates and resort to tax liens (aka asset and property seizure).
If you don't owe taxes
If you don't have any unpaid taxes, you typically won't face any penalties for not filing your tax return. But even if you don't have to file, you should still file a tax return if you can get money back. While you can file your return later if you decide you want to take back any cash you may not have reclaimed, you'll be racing the clock. You generally have 3 years from the date the return was originally due to file and prove your eligibility for a refund.
Even if you don't have a refund coming your way, you are generally still required to file a federal tax return. It's the basis for many financial benefits, from future Social Security payments to loan eligibility, so you'll want to make sure your return paints as accurate a picture as possible.
What if you can't file your taxes on time?
If you don’t think you'll be able to file your tax return by Tax Day (April 15, 2024, or April 17, 2024 if you live in Maine or Massachusetts), you can request an extension until October 15, 2024. But be aware that this extension only applies to the return itself. Any taxes you owe are still due on Tax Day and may start accruing failure-to-pay penalties and interest after that day.
If you know that you aren't going to be able to pay the taxes you owe, you can still file your return on time to avoid the failure-to-file penalty, pay what you can, and then apply for a payment plan, which may help you reduce or avoid future penalties.
- Short-term payment plans allow you to pay within 180 days or less and are available to taxpayers who owe less than $100,000 in combined taxes, penalties, and interest.
- Long-term payment plans are designed to be paid over more than 180 days. They are available to those who owe less than $50,000 in combined taxes, penalties, and interest, and who have filed their required return forms.
To apply for a payment plan, you can choose one of the following options:
- Fill out an Online Payment Agreement Application.
- Mail Form 9465 (Installment Agreement Request) with a copy of your bill to the IRS.
- Call the phone number listed on your balance notice to request an installment agreement.
If you are unable to pay your full tax debt in installments, you may be eligible to apply for an Offer in Compromise (OIC), which provides an avenue to settle your debt at a lower amount. To see if you're eligible, use the IRS’s OIC Pre-Qualifier tool. Then complete the application package as instructed in the Form 656 Booklet.
If you're unable to pay any of your debt due to financial hardship, you can request to delay collection. To determine if that's feasible, call the number listed on your collection notice. Consult with a tax advisor for questions about your specific situation.