How much money do you have to earn to avoid paying taxes?

The amount you must earn to avoid paying taxes depends on your age, marital status, dependence on other taxpayers, and your gross income. For instance, in 2018, the maximum profit before paying taxes for a single person below 65 was $12,000.

If your income is below the limit specified by the IRS (Internal Revenue Service), you may not have to file taxes, although it is better to do so.

This article covers: 

How much money can I earn without paying taxes?

Not everyone must pay taxes. Five things determine whether you are required to pay taxes. These are:

  • Filing status
  • Age
  • Number of Indepence
  • Gross income
  • The blindness

Based on a person’s income:

Under the progressive income tax system, the amount you must pay each year will depend on your income, which means that the more you earn, the more you pay. So you may be wondering.

How much money do I have to make to avoid paying taxes?

If your earning is equal to or greater than these amounts, you will have to file taxes. The IRS has published these tables are published in Publication 17 and Publication 501 and are updated each year.

Tax filing statusAge Gross Income
Single Less than 65 years$10,400
Single 65 years or more$11,950
Married filing jointlyUnder 65 (both spouses)$20,800
Married filing jointly 65 or over (one spouse)$22,050
Married filing jointly Over 65 (both spouses)$23,300
Married filing separatelyAnyone$4,050
Family headLess than 65$13,400
Family head65 or more$14,950
Qualifying widow (er)Less than 65$16,750
Qualifying widow (er)65 or above$18,000

Filing requirements for dependents

Taxpayers who are declared as dependents are subject to different laws for filing taxes.

Dependents include children under the age of 19 (or under the age of 24 if they are students) or disabled who live by your relatives and qualify (a family member or who lives with you year-round). When your earned income is higher than the standard deduction, taxes must be reported. A dependent’s income is not reported when it comes from sources such as dividends and interest.

A Single, below 65 who is not blind, must file their taxes if:

  • Unearned income was more than $1,050
  • The income obtained was more than $12,000
  • Gross income was greater than $1,050 or earned income up to $11,650 plus $350
  • A single person who is 65 or older or blind must file a return if:
  • If your unearned income was more than $2,650 or $4,250 if you are both 65 and older and blind.
  • If your earned income was more than $13,600 or $15,200 if both are 65 or older and blind.
  • A married person, below 65 who is not blind, must file a return if:
  • Unearned income was more than $1,050
  • The income obtained was more than $12,000
  • His gross income was at least $5, and his spouse itemized the deductions.
  • Your gross income was greater than the greatest of $1,050, or your earned income was $ 11,650 plus $350 
  • Married, 65+ or blind dependent must file a return when:
  • If your earned income was at least $5, and his spouse itemized the deductions.
  • Your unearned income was more than $2,350 or $3,650 if they are both 65 and older and blind.
  • If your earned income was more than $13,300 or $14,600 if both are 65 or older and blind.
  • If your gross income was more than $2,350 ($3,650 if you are both 65 or older and blind) or your collected income was $11,650 plus $1,650 ($2,950 if both of you 65 or older and blind).

How much can a small business earn before paying taxes?

If you own a small business, you have to pay income taxes regardless of profit and loss. The tax return you must file depends on the structure of your business. For instance, if you are the sole owner of the company, you must file Schedule C with your tax return. 

If you are self-employed, you must also pay a self-employment income tax of more than $400. These taxes cover social security and Medicare taxes.

As a sole proprietor, you must file IRS Form 1040, Schedule C, and Schedule SE if their net income is greater than $400. If you have any worker, you must withhold your federal and state income taxes, as well as health and social security taxes on every worker.

How can I reduce my taxable income?

The one way to reduce taxable income is by saving for retirement with traditional IRA accounts (not Roth ) and 401 (k), up to the maximum acceptable contribution. 

Contributions to Flexible Spending Accounts (FSA) Health Savings Accounts (HSA)are another way to lower your taxable income.

You could make a lot of money before paying taxes. However, even if your income is below the limit and you are not required to pay taxes, you will anyhow need to file your tax return to get a refund check.

How can I get an income tax credit?

The Earned Income Tax Credit is a refundable credit that reduces your tax bill dollar by dollar, as opposed to a deduction that reduces the taxable income you have. This credit was created to help supplement low-income people’s wages and can be applied for whether you have children or not.

But, like determining your minimum income requirement for filing taxes, determining your eligibility can be tricky. For more information about IRS Notice 797 and the Earned Income Tax Credit, visit the IRS website.

Should I file a return even if I don’t have to?

If you earn less than the minimum wage requirements to file taxes, you don’t need to file them. However, there are some possible reasons to file a report, even if you are below the minimum requirements line:

  • You may still have some federal income tax withheld, so you’ll want to file a return to get a refund.
  • You earned at least $400 through self-employment efforts
  • You may entitle tax credits that can be considered a refund, even if you exceed the amount you owe.
  • You made estimated tax payments
  • You can save yourself from future IRS audits by starting the countdown in the statute of limitations (which is usually three years from previous returns).

A reminder: if you choose to file federal taxes but don’t pay other debts (like state taxes or student loans), you could receive tax compensation that would jeopardize your ability to receive a refund.

Do students have to file taxes?

  • Going to school and attending classes is already stressful, so it is essential to know if it is necessary to add taxes to the mix. If you (the student) can be declared as a dependent, you must declare taxes if:
  • Your earned income is more than $6,350
  • Your non-earned income is more than $1,050
  • Your net business or self-employment income is at least $400
  • Gross income was more than $1,050 or income earned up to $6,000 plus $350, whichever is greater.

How can I file a tax return?

If you find out that you earn the minimum amount to file taxes and want to get a tax refund, you will need to fill out Form 1040. On this form, you will report your total salary and wages to determine the amount of money you will receive for a federal tax refund, or if you owe additional money. If this seems daunting, you can take advantage of tax preparation services to help you with the return or any other document that you should send to the IRS.

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