You may not have to file a tax return if your income was less than the standard deduction. However, if you make more than the standard deduction, you will either be penalized for failing to pay your taxes or miss out on a tax refund if you don’t file. Failure to file also results in a penalty of 0.5%² each month on any unpaid taxes, capped at 25%, which can add up to a large chunk of change that you will have to pay out.