When do I (as a resident) meet the gross income thresholds that require me to file a U.S. income tax return? Updated for 2023 Income Thresholds
In 2014, this blog explained the income thresholds relevant for filing tax returns during those years. However, the tax reform implemented in 2018, known as the Tax Cuts and Jobs Act (TCJA), brought significant changes to who is required to file tax returns based on income thresholds. So, when exactly do I reach the gross income thresholds that necessitate filing a U.S. income tax return? Old Post (2014)
These thresholds differ significantly from those in 2014 due to the TCJA passed in 2017.
That blog post detailed specific requirements applicable only to U.S. resident individual taxpayers:
Any USC individual (and any LPR who does not live in a country with a U.S. income tax treaty) is obligated under the U.S. federal tax law to file a federal income tax return IRS Form Form 1040 if they meet minimum thresholds of income. The thresholds are low, and are reached once the gross income is at least the sum of (i) the “exemption” amount (currently US$3,900 per exemption) and (ii) the “standard deduction” amount.
Accordingly, even if a USC or LPR has even a modest sum of “gross income”, which equates to at least US$10,000 (in whatever currency earned), the USC or LPR will probably have a U.S. tax return filing requirement.
Several significant developments have occurred since the publication of that blog post. First, the federal tax reform primarily applicable for the 2018 tax year, the The 2017 Tax Cuts and Jobs Act (TCJA), substantially altered various tax concepts. Specifically, the TCJA eliminated the concept of “personal exemptions” for the taxpayer, spouse, and dependents. These were previously used to calculate income thresholds determining whether a U.S. resident taxpayer had to file a tax return or not. However, they are no longer applicable. The standard deduction is now key to determine who is required to file.
A recent federal report from Congressional Research Service (CRS Report explains -Nov. 2023): Under the TCJA, basic standard deduction amounts in 2018 were nearly doubled to $12,000 for single filers, $18,000 for head of household filers, and $24,000 for married joint filers. These amounts were annually adjusted for inflation after 2018. In 2024, these amounts are $14,600, $21,900, and $29,200, respectfully.
Hence, for U.S. residents, the filing thresholds have increased substantially for those required to file U.S. tax returns: $14,600 for single filers, $21,900 for head of household filers, and $29,200 for married joint filers for the 2024 tax year.
Non-residents have a completely different rule as to when they are required to file U.S. non-resident tax returns (1040NR), which will be discussed in a later blog. A non-resident can have as little as say US$1,500 of income sourced from the United States and have an obligation to file a tax return. Totally different thresholds and totally different rules are applicable.