How Much Money I Need To Make To File Taxes
How Much Money Do I Need To Make To File Taxes?
Do you need to file taxes each year? It’s an important question to ask yourself, as the answer may have a significant impact on your financial situation. Filing taxes is an obligation for all Americans and if you don’t file, you may be subject to fines and penalties. But how much money do you need to make in order to be required to file taxes? The answer isn’t a simple one, as there are factors such as your age, filing status, and income that can all impact the amount of taxes you owe.
Who has to File Taxes?
Generally speaking, most people are required to file taxes each year. The Internal Revenue Service (IRS) sets a minimum amount of money that you must earn in order to be required to file taxes. This amount is known as the filing threshold, and the amount can vary based on your age, filing status, and other factors. For instance, the filing threshold for single taxpayers under the age of 65 is $12,400 in 2021. That means if you are a single taxpayer under the age of 65 and you earned more than $12,400 during the 2021 tax year, then you are required to file taxes.
What if I Earned Less than the Filing Threshold?
If you earned less than the filing threshold, then you are not required to file taxes. However, you may still want to file taxes if you are eligible for certain tax credits or deductions, such as the Earned Income Tax Credit (EITC) or the Child and Dependent Care Tax Credit. By filing taxes, you may be able to get money back in the form of a refund, which can be a great way to boost your savings or pay off debt.
What if I'm Self-Employed?
If you are self-employed, then the filing threshold is different. The IRS requires self-employed individuals to file taxes if they earned more than $400 in net income from self-employment activities. That means that if you earned any amount of money from self-employment activities, then you are required to file taxes regardless of your total income.
What if I'm a Dependent?
If you are a dependent of someone else, then the filing threshold is also different. Generally speaking, dependents are required to file taxes if their earned income is more than the standard deduction for their filing status. For instance, if you are a dependent and you earned more than the standard deduction for a single filer ($12,400 in 2021), then you are required to file taxes. It’s important to note that there are other factors that may impact your filing requirements, such as if you are claiming certain credits or deductions.
What if I'm a Non-Resident Alien?
If you are a non-resident alien, then you are required to file taxes if you meet certain criteria. Generally speaking, non-resident aliens are required to file taxes if they earned more than the filing threshold for their filing status, which is the same as it is for US citizens. Additionally, non-resident aliens are also required to file taxes if they have certain types of income, such as income from US sources, regardless of the amount. It’s important to note that the rules for non-resident aliens can be complex, so it’s best to consult with a tax professional if you have any questions.
Conclusion
As you can see, the amount of money you need to make in order to file taxes can vary based on your age, filing status, and other factors. It’s important to understand the filing threshold for your situation in order to ensure that you are in compliance with the IRS’s requirements. If you have any questions about your filing requirements, it’s best to consult with a tax professional for advice.
