If you just got clean in the last few months and barely worked at all last year due to addiction, then you may wonder whether or not the tax deadline this month applies to you. The short answer is “yes.” The tax deadline applies to you and everyone else. You are not exempt.
Having a job does not necessarily mean you have to pay taxes, but not having a job doesn’t mean that you don’t have to file. Confused? You’re not alone. Here’s what you need to know to determine if you need to pay taxes for 2017:
- Even if you did not a work a single day last year, you need to file taxes. A formal record demonstrating that you filed and do not owe can save you a lot of trouble in the future. Rather than having to backtrack and explain things later, it makes it easier if you already have it on file that you were not employed, and you do not owe Uncle Sam.
- Not everyone who worked will owe taxes. There are a number of situations in which you may be exempt from paying taxes, but just like those who made no money at all, you still need to file to prove you met those exemptions.
- Start with figuring out your gross income. Your gross income is all the money you made that is taxable. If you received a paycheck or payment for goods or services and it is considered taxable income, then it falls in this category. If you sold some old clothes for $5, that’s not taxable. If you were paid for babysitting or working a retail job, it’s taxable. If this came from a number of different sources, add it all up to find your gross income for 2017.
- Figure out your filing status. If you are unmarried with no dependents and living with roommates or in another shared household, you will file “single.” If you pay for more than half of the household bills and have a child or other dependent like an elderly parent or special needs family member, then you will file “head of household.” If you are married, you will need to decide if you will file your own separate tax returns or you will file your taxes together – either “married filing jointly” or “married filing separately.” If your spouse has passed and you have a child, then you may file as a “qualifying widow(er) with dependent child.”
- Age matters. Whether or not you are over or under the age of 65 will play a role as well.
Put It All Together
With all this information in hand, you can now begin the process of determining whether or not you earned enough to have to pay taxes. This is determined by Publication 17 and Publication 501, documents updated by the IRS every year. Make sure to double check these forms before you file believing that you don’t owe. In most cases, your gross income combined with your filing status and age will determine at what point you begin to pay taxes:
- Single: If you were 64 or younger in 2017, you will pay taxes if you made $10,400 or more. If you are 65 or older, you will pay taxes on gross income of $11,950.
- Head of household: Under the age of 65, you will pay taxes on income of $13,400+, and aged 65 or older, you will pay taxes on $14,950 or more.
- Qualified widow(er) with dependent: If you are over the age of 65, you will pay taxes on $18,000 per year in gross taxable income or higher, and if you are under the age of 65, your gross income becomes taxable if you make $16,750 or more.
- Married: If you are married filing separately, both of you will be required to pay if you made more than $4,050 last year. If you are married filing jointly, you will pay taxes on your combined total gross income if it totals more than $20,800 (if both spouses are under the age of 65), more than $22,050 (if one spouse is 65 or older), and $23,300 (if both spouses are 65 or older).
Of course, if someone else can claim you as a dependent or if you are blind, then the amounts listed above will be different; in most cases, you owe taxes on a much lower gross income than you would otherwise. Make sure to look up the answers to any questions you have or get help on the IRS site or by contacting them directly.
If you owe taxes, even if you do not have the ability to pay, it is important to talk to the IRS, let them know your circumstance, and work out a payment plan sooner rather than later. The more proactive you are, the more willing they will be to work with you and come up with options that are feasible for you in recovery.