Maximize Refunds: Why Filing Your Tax Return Matters

Completing your tax return might seem unnecessary if your income doesn't exceed the standard deduction for your filing status. However, filing a return could unlock significant benefits that you wouldn't want to miss. By not filing, you might forfeit substantial refundable tax credits and the opportunity to use carryovers for tax benefits.

Image 1

For the 2025 tax year, the IRS has set income thresholds for filing a tax return in 2026 as follows:
2025 INDIVIDUAL INCOME TAX RETURN FILING THRESHOLDS

FILING STATUS UNDER AGE 65 AGE 65 OR OLDER
Single $15,750 $17,750
Head of Household $23,625 $25,625
Married, Filing Jointly $31,500 (if both spouses are under 65)
$33,100 (if one spouse is 65+)
$34,700 (if both are 65+)
Married, Filing Separately $5 (any age) $5 (any age)
Qualifying Surviving Spouse $31,500 $33,100

Other Filing Requirements - There are situations where filing is necessary despite your income being below the threshold:

  • You earned $400 or more from self-employment.
  • You owe taxes like the Alternative Minimum Tax.
  • You received Premium Tax Credit advances for marketplace health insurance.
  • You have church income above $108.28.
  • There are uncollected Social Security or Medicare taxes owed.
  • You owe household employment taxes.
  • Your family accessed a Health Savings Account (HSA) distribution.

Dependent Filing Requirements - Dependents might need to file if they exceed certain income thresholds:

  • Unearned income over $1,350.
  • Earned income exceeding $15,750.
  • Gross income that surpasses $1,350 or the sum of earned income plus $450.

Potential Benefits of Filing: Skipping a tax return can lead to leaving large amounts of money unclaimed. Here's what's at stake:

Let’s Start a Conversation.
You can count on us for professional guidance along with timely, and reliable tax services. If you’re ready to get started, or just want to start a conversation, then click below.
Learn More

  • Tax Withholding - Taxes withheld from wages are fully refundable if no return is required. Refundable tax credits can result in a return even if your tax liability is nil.
  • Image 2
  • Earned Income Tax Credit (EITC) - Targeted at low to moderate-income workers, the EITC could offer up to $8,046 in 2025, a fully refundable credit.
  • Child Tax Credit (CTC) - Available for those with children under 17, providing a credit up to $2,200 per child, with $1,700 refundable.
  • American Opportunity Tax Credit (AOTC) - Grants up to $2,500 per student annually. Forty percent is refundable, potentially offering a $1,000 refund for qualifying educational expenses.
  • Premium Tax Credit - Helps reduce health insurance costs through the Health Insurance Marketplace.

Managing Carryover Deductions: Even when not filing is required, carrying forward certain deductions demands a filed return:

  1. Net Operating Losses (NOLs): Prior business losses can carryforward for up to 20 years.
  2. Charitable Contributions: Excess donations can be carried forward five years, ensuring deductions are not wasted.
  3. Passive Activity Losses: Typically related to rentals, these can offset future passive income.
  4. Capital Losses: Carry excess losses to offset future gains or income, ensuring longer-term tax efficiency.
Image 3

Additional Considerations:

  1. State Benefits: Federal filing can impact state taxes and eligibility for state programs.
  2. Financial Tracking: Filing ensures a full record for financial transactions like loans or aid applications.
  3. Security Assurance: Completing tax returns can prevent identity theft, safeguarding your financial identity.

Despite not being required, filing your return could result in refunds worth thousands. Approximately 25% of eligible individuals miss out on the EITC, highlighting the benefits of tax return filing. Contact our office to uncover potential advantages and seek assistance in preparing your return for current or past years to claim missed refunds.

Let’s Start a Conversation.
You can count on us for professional guidance along with timely, and reliable tax services. If you’re ready to get started, or just want to start a conversation, then click below.
Learn More
Share this article...

Want tax & accounting tips and insights?

Sign up for our newsletter.

I confirm this is a service inquiry and not an advertising message or solicitation. By clicking “Submit”, I acknowledge and agree to the creation of an account and to the and .
Let Wastvedt and Company, Inc. remove your tax & accounting stress today.
Contact us to learn more.
Wastvedt and Company, Inc. We love to chat!
Please feel free to use the contact button or use our Ai powered chat assistant.
Please fill out the form and our team will get back to you shortly The form was sent successfully