There
is a common saying in life that talks about how taxes are inescapable. And,
while that may hold true most of the time, there are some situations in which
you can get away with not paying taxes.
If,
for example, your income for the tax year doesn’t go over the standard
deduction and one exemption, then you won’t have to file a return. That’s just
one situation, however, out of many in which you might not have to pay taxes.
Because
tax laws can be tricky and because you don’t want to fail to file when you’re
supposed to, it’s important to understand how it all works.
Gross
Income
To
begin with, it is important to understand that all taxpayers can claim a
“standard deduction.” And, providing that these taxpayers are not listed as
dependents on someone else’s return, they can file one exemption too.
The
standard tax deduction as well as the allowed exemption amount is determined by
the IRS each year and will typically
change from year to year, so it is always wise to be aware of what the current
standard is.
Keep
in mind, however, that if your income is
equal to or less than the sum of the exemption and standard deduction, it will
not be taxable. In this situation, you would not be required to file a tax
return.
Dependents
So,
what if you are listed as a dependent on someone else’s tax returns? When
that’s the case, your filing
requirements are a little different.
For
example, you cannot claim your own exemption, but you will need to file a tax
return if you earn more than the standard deduction for a single taxpayer.
As
you can see, tax laws are complex, change regularly, and can be hard to
navigate. If you need some help understanding it all or if you’re uncertain
about whether or not you need to file a return this year, be sure to check with
a tax professional before you assume anything. After all, it is always better
to be safe than sorry.