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What To Do If You Don’t Have to File a Tax Return (Tell the IRS?)

A reader writes in, asking:

“As a family courtesy, I recently began completing/filing taxes for two sets of elderly relatives with very small incomes (Social Security, pensions, IRAs).  In reviewing their past years returns, I found they have not had to pay taxes for several years, with their total incomes significantly below the thresholds established by the IRS and state.  Barring a winning lottery ticket, year after year, they owe no taxes, plain and simple.  My understanding from reading the tax code is that they can stop filing altogether, but this idea makes them nervous and even I – after a lifetime of filing taxes – find it contrary to my ‘conditioned response.’  While the codes on ‘Who Must File’ are clear, should we send a one-time letter to the IRS informing them of our intent to stop filing?”

If a person does not need to file, there’s no need to send the IRS any letter indicating such. They can simply not file, and if the IRS later contacts them about the lack of a return, they can reply with a letter indicating the reason (i.e., gross income below applicable threshold and did not meet any of the other “must file” reasons). And, if the person wanted to do so, they could include in that letter a statement indicating that, barring unforeseen circumstances, they will continue to be below the applicable threshold going forward.

I would be cautious about getting into a “not filing” habit though. Circumstances can change in the future. And that applies not just to personal circumstances but also tax law-related circumstances. That is, the rules may change in the future — potentially lowering the “must file” threshold*, potentially adding a new type of tax that the person would have to pay even with a low income, or potentially adding a new refundable credit which the person could claim if they filed. In other words, I would make a point of conscientiously checking every year whether there are any circumstances that would either require filing or make filing beneficial.

As a separate point, even when filing isn’t required, tax returns (even if simply prepared and not actually filed) can often serve as a useful overall record of the person’s finances. A lack of records has a tendency to make things harder at various times down the road — whether for the person in question, heirs, or executors.

*In fact, as the law is written right now, the “must file” threshold will go down significantly in 2026 once the temporary increase in the standard deduction expires.

For More Information, See My Related Book:

Book3Cover

Taxes Made Simple: Income Taxes Explained in 100 Pages or Less

Topics Covered in the Book:
  • The difference between deductions and credits,
  • Itemized deductions vs. the standard deduction,
  • Several money-saving deductions and credits and how to make sure you qualify for them,
  • Click here to see the full list.

A testimonial from a reader on Amazon:

"Very easy to read and is a perfect introduction for learning how to do your own taxes. Mike Piper does an excellent job of demystifying complex tax sections and he presents them in an enjoyable and easy to understand way. Highly recommended!"
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