How Much Can I Make and Not File Taxes 2019

• Some Americans don't owe taxes on their income because it is too low.
• Even if you are not required to file a tax return, you may want to so you can claim refundable credits.
• Many people who don't pay federal income tax do work and owe payroll taxes.
• This article was reviewed for accuracy and clarity by Sheneya Wilson, an expert on Personal Finance Insider's tax review board.
• See Personal Finance Insider's picks for the best tax software »

It was Benjamin Franklin who famously wrote in 1789, "In this world, nothing is certain except death and taxes."

While the first part remains true today (we have yet to crack the code on eternal life), taxes on income are not certain for every American.

According to estimations from the nonpartisan Urban-Brookings Tax Policy Center, 75.5 million Americans, or about 43% of total tax units (one unit is equal to either a single filer or one married couple filing jointly) are expected to have a zero or negative income tax bill for the 2020 tax year.

"The large percentage of people who don't owe federal income tax is a feature, not a bug, of the revenue code," write the Tax Policy Center's Philip Stallworth and Daniel Berger. "By design, the federal income tax always has excluded a significant fraction of households through a combination of personal exemptions, the standard deduction, zero bracket amounts, and more recently, tax credits."

According to the Tax Policy Center's 2018 estimation, nearly 99 million Americans were expected to file a tax return in 2020. That figure may increase due to the pandemic, however, since people are being asked to file a tax return to claim unpaid stimulus checks, even if they aren't required to based on income.

How much do you have to make to file taxes?

Not "losing" a portion of your paycheck to taxes may sound nice to some, but it's not a luxury. Millions of Americans don't owe taxes on their income because they don't earn enough money.

As a benchmark, if you're under age 65 and earned less than the standard deduction, you won't have to file a federal tax return, though there are a few exceptions. The standard deduction is taken before taxable income is calculated and can wipe out your total tax liability if you didn't earn enough.

Here are the standard deduction amounts for 2021 and 2020.

If you're over 65, there's an additional $1,650 added to your standard deduction if you file as single or head of household (the same is true if you're legally blind). If you file jointly with a spouse, your standard deduction increases by $1,300 for each person over the age of 65 (again, the same is true if you're legally blind).

How a negative tax bill could turn into a refund

Consider this example of a woman who doesn't owe federal income tax and will likely end up with a refund:

Amy is a single mother who earned $20,000 in 2020. The standard deduction for head of household of $18,650 as a single parent reduces her taxable income to $1,350, which places her in the 10% tax bracket ($0 to $9,525). Her tax bill comes out to $135.

If she qualifies for the earned income tax credit (EITC), a subsidy for low-income working families, she can reduce her tax bill by up to $3,584, the maximum for a family with one child in the 2020 tax year. She may also claim the child tax credit (CTC), which allows her to apply a credit of up to $2,000 to her tax bill.

Amy will end up with a negative final tax bill, and since EITC and CTC are refundable, she'll receive the credits as cash.

But while Americans who earn too little don't pay income taxes, those who hold a job are still subject to payroll taxes, which support Social Security, Medicare, and unemployment insurance. And some taxes are certain for everyone, regardless of income, including sales taxes, excise taxes, and property taxes.

• Tanza Loudenback

  Correspondent, Personal Finance Insider

  Tanza is a CERTIFIED FINANCIAL PLANNER™ and former correspondent for Personal Finance Insider. She broke down personal finance news and wrote about taxes, investing, retirement, wealth building, and debt management. She helmed a biweekly newsletter and a column answering reader questions about money. Tanza is the author of two ebooks, A Guide to Financial Planners and "The One-Month Plan to Master your Money." In 2020, Tanza was the editorial lead on Master Your Money, a yearlong original series providing financial tools, advice, and inspiration to millennials. Tanza joined Business Insider in June 2015 and is an alumna of Elon University, where she studied journalism and Italian. She is based in Los Angeles.

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How Much Can I Make and Not File Taxes 2019

Source: https://www.businessinsider.com/personal-finance/how-much-do-you-have-to-make-to-file-taxes

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