How Much Do You Have To Make To File Taxes?
How much money you have to make to file taxes depends on a variety of factors. Learn the latest tax filling amounts and exceptions to see if you need to file a return or not.
Whether you’re self-employed, work for an employer, or own your own business, tax time can be a real hassle. If your situation has recently changed — you quit your job to work for yourself or you took on a part-time side job — taxes can be even more confusing. In fact, you might be unsure of whether you even need to file this year.
That’s where this guide will come in handy!
In this post, we’re going to break down the income requirements for filing your taxes. We’ll go over how to calculate your total income, how to lower your taxable income and your tax liability to the Internal Revenue Service, and the important tax dates you need to mark in your calendar. Keep reading to learn more about how much you have to make to file taxes.
Table of Contents
- How Much Money Do You Have To Make To Pay Taxes?
- The Minimum Income To File Taxes
- The Minimum Income To File Taxes For Dependents
- How To Calculate Your Total Income For The Year
- If I Don’t Meet The Minimum Income Requirements, Should I Still File A Tax Return?
- Filing For A Business? How Much Small Businesses Have To Make To Pay Taxes
- How To Lower Your Taxable Income & Save On Your Tax Return
- Important Tax Due Dates & Other Tax Filing Tips
- Tax Filing FAQs
How Much Money Do You Have To Make To Pay Taxes?
How much money you have to make to file taxes is based on a number of factors, including your age, filing status, and whether or not you’re a small business owner or self-employed. Even if you aren’t required to file a tax return, it may be a good idea to go ahead and do it, especially if you have dependents to claim on your return. You may find that you qualify for certain tax credits or overpayments that can result in a refund.
The Minimum Income To File Taxes
|Filing Status||Younger Than 65||65 & Older|
|Married Filing Joint||$25,100||$26,450 (one spouse); $27,800 (both spouses)|
|Married Filing Separate||$5||$5|
|Head Of Household||$18,800||$20,500|
If your income meets or exceeds the requirements set forth by the IRS based on your age and filing status, you will be required to file a tax return. The chart above outlines these requirements for individuals. This does not apply to dependents — we’ll talk more about that in the next section.
If you own a small business, you must file an annual income tax return regardless of your income. Certain businesses aren’t taxed separately. Instead, you will report the business’s profit or loss on your individual tax return. Businesses that are taxed on the individual level are also known as pass-through businesses. Pass-through businesses that pay taxes on the individual level include:
- Sole Proprietorships
- LLCs (in some cases)
If you’re a freelancer, the income limits in the table above don’t apply. Instead, you must file a tax return if your net earnings from self-employment were $400 or more. You will also be required to file a tax return if you’re a church employee with income of $108.28 or more. In either of these situations, you will be required to file IRS Form 1040 or IRS 1040-SR, along with a Schedule C.
The Minimum Income To File Taxes For Dependents
Income Requirements For Single Dependents
|Type Of Income||Younger Than 65||Older Than 65||Older Than 65 & Blind|
|Unearned Income||More than $1,100||More than $2,750||More than $4,400|
|Earned Income||More than $12,200||More than $13,850||More than $15,500|
|Gross Income||More than $1,100||More than the larger of $2,750 or earned income up to $11,850 plus $2,000||More than the larger of $4,400 or earned income up to $11,850 plus $3,650|
Income Requirements For Married Dependents
|Type Of Income||Younger Than 65||Older Than 65||Older Than 65 & Blind|
|Unearned Income||More than $1,100||More than $2,400||More than $3,700|
|Earned Income||More than $12,200||More than $13,500||More than $18,400|
|Gross Income||More than $1,100||$5 or more if spouse filed separate and itemized deductions; more than the larger of $2,400 or earned income up to $11,850 plus $1,650||$5 or more if spouse filed separate and itemized deductions; more than the larger of $3,700 or earned income up to $11,850 plus $2,950|
The IRS defines a dependent as a qualifying child or relative of a taxpayer. A spouse does not qualify as a dependent. Examples of a dependent include a brother, sister, child, stepchild, or parent.
A person that is dependent is claimed on another taxpayer’s tax return for a credit. However, if the dependent brings in income, they will also need to file their own tax return. Note that these income limitations differ from those for individual taxpayers.
How To Calculate Your Total Income For The Year
Calculating your total gross income for the year isn’t difficult. Simply add together all sources of income that you received for the current tax year.
Here are a few helpful tips to simplify the process:
- Include All Income: All income for the year is required to be reported to the IRS. This includes wages from your job, self-employment income, commissions, tips, and interest income.
- Gather Documentation: For accurate calculations, gather everything documenting your income. This includes W-2s for wages and 1099-MISCs for contracted work, as well as, bank statements and accounting records.
- Track Income Accurately: If you’re married and filing a joint return, ensure that your income and your spouse’s income are tracked and reported accurately.
- Calculate Your Taxable Income: If your total yearly income is high, don’t panic. On your tax return, you’ll be able to lower your taxable income with deductions and credits, which in turn lowers your tax liability. We’ll explore this more in further detail a little later.
If I Don’t Meet The Minimum Income Requirements, Should I Still File A Tax Return?
Even if you don’t meet the minimum income requirements, you may still choose to file a tax return. This is particularly true if you will be receiving a tax refund. There are also other instances where you may not meet the income requirements but meet other IRS requirements that would require you to file your federal tax return.
Other Reasons You May Need To File A Tax Return
Even if you don’t meet the income requirements of the IRS, you may still be required to file a tax return. You are required to file your taxes if any of the following apply:
- You had a self-employment income of $400 or more.
- You had an income of $108.28 or more when working for a church or church-controlled organization.
- You or your spouse received Archer MSA, Medicare Advantage MSA, or health savings account distributions.
- You received a Form 1095-A because payments of the premium tax credit were made for you, your spouse, or a dependent who enrolled in coverage through the Health Insurance Marketplace.
- You received a Form 1099-H for advance payments of the health coverage tax credit made for you, your spouse, or a dependent.
- You are required to include amounts in income under section 965, you are paying installments on a net tax liability under section 965(h), or you deferred by making an election under section 965(i).
- You owe special taxes included on Schedule 2, including but not limited to household employment taxes, alternative minimum tax, and recapture taxes.
Even if you don’t have to file a tax return, there are some reasons why you may want to go ahead and file. You may be due a refund, and if you don’t file, you’ll miss out on receiving this money. Consider filing your taxes if any of the following apply:
- Income tax was withheld from your pay.
- You made estimated tax payments.
- Your overpayment for last year was applied to this year’s estimated taxes.
Additionally, you may also be eligible for a refund if you qualify for any of the following tax credits:
- Earned income credit
- Child tax credit
- American opportunity credit
- Health coverage tax credit
- Federal taxes on fuels
- Recovery rebate credit
- Premium tax credit
- Recovery rebate credit
- Sick & family leave credit
- Child & dependent care expenses credit
Filing For A Business? How Much Small Businesses Have To Make To Pay Taxes
If you own a small business, you must file an annual income tax return.
The only exception is partnerships, which are required to file an information return.
The filing requirements for small businesses vary based upon the business’s legal structure. Pass-through businesses such as sole proprietorships and S-corporations are taxed at the individual level. This simply means that the owner of the business adds the profit or loss to their individual tax return.
Not all businesses are pass-through businesses and will have to file different forms. Businesses that are not classified as pass-through businesses include:
- LLCs that are taxed as corporations
The required tax forms that need to be filed each year vary based on the structure of the business. Additionally, businesses may also have to file additional tax forms throughout the year and pay estimated taxes each quarter.
If you are a freelancer, you may not be required to file taxes. If you make a freelance income of $400 or more from a single employer, you are considered self-employed and must file a federal income tax return with the IRS.
How To Lower Your Taxable Income & Save On Your Tax Return
No one wants to fork over their funds to the IRS each tax year, but for some, it’s inevitable. Fortunately, there are a number of legal ways that you can lower your taxable income, so you can lower your tax liability and keep more of your hard-earned money in your own pocket.
Ready to save on your taxes? Here are some ways that you can lower your taxable income:
- Claim the home office deduction if you’re self-employed.
- Don’t overlook small business tax deductions.
- Contribute to a retirement plan.
- Contribute to a health savings account (HSA).
- Take advantage of your employer’s flexible spending account (FSA).
- Clain the earned income credit (EIC), the child tax credit, and other credits, if eligible.
- Claim credits for educational expenses.
- Write off charitable donations.
- Set up a 529 plan for educational expenses for your children.
- Report investment losses.
These are just some of the major ways you can lower your tax liability. For more tips and advice, consult an accountant or tax professional.
Important Tax Due Dates & Other Tax Filing Tips
|Individual Income Tax Return||April 15|
|Individual Income Tax Return Extension||April 15|
|1st Quarter Estimated Quarterly Taxes||April 15|
|2nd Quarter Estimated Quarterly Taxes||June 15|
|3rd Quarter Estimated Quarterly Taxes||September 15|
|Extended Individual Income Tax Return||October 15|
|4th Quarter Estimated Quarterly Taxes (For Previous Year)||January 15|
If you’re filing taxes, there are a few key due dates to keep in mind. The dates generally remain the same from year to year. However, if a due date falls on a weekend or holiday, it is pushed back to the next business day. So, for 2022 taxes are due on April 18.
Once you’ve determined that you need to file taxes, there are a few steps you can take to make sure they’re filed quickly and accurately:
- Use tax software to maximize deductions, reduce errors, and receive audit protection.
- Consider hiring an accountant or tax professional if you have a complicated tax return. Even though you have to pay for these services, you could end up saving money if they find extra tax deductions and credits.
- Keep accurate financial records throughout the year. Use accounting software and hold onto your receipts, bank statements, and other documentation.
- If you don’t have time to gather your documentation and file your return, make sure to file for a six-month extension before the due date. Note that an extension does not delay your obligation to pay, and failure to pay by the April due date will result in interest and penalties.
- Check out Merchant Maverick’s additional tax resources, including our tax prep checklist, to take the stress out of filing your taxes.