Understanding the Basics of Tax Filing
When it comes to filing taxes, one of the most common questions people ask is, “How much money do you have to make to file taxes?” The answer to this question can vary depending on several factors, including your filing status, age, and whether you are self-employed or employed by someone else.
Filing Status
Your filing status plays a significant role in determining whether you need to file taxes and how much money you must earn to do so. The five filing statuses are:
- Single
- Married Filing Jointly
- Married Filing Separately
- Head of Household
- Qualifying Widow(er) with Dependent Child
Standard Deduction
The standard deduction is an amount that reduces your taxable income. For the tax year 2021, the standard deduction amounts are as follows:
| Filing Status | Standard Deduction |
|---|---|
| Single | $12,550 |
| Married Filing Jointly | $25,100 |
| Married Filing Separately | $12,550 |
| Head of Household | $18,800 |
| Qualifying Widow(er) with Dependent Child | $25,900 |
Age and Tax Filing
Age is another factor that can affect your tax filing requirements. If you are 65 or older, you may be eligible for a higher standard deduction. For the tax year 2021, the additional standard deduction amounts are as follows:
| Filing Status | Standard Deduction | Additional Standard Deduction |
|---|---|---|
| Single | $12,550 | $1,700 |
| Married Filing Jointly | $25,100 | $1,350 each |
| Married Filing Separately | $12,550 | $1,350 |
| Head of Household | $18,800 | $1,700 |
| Qualifying Widow(er) with Dependent Child | $25,900 | $1,700 |
Self-Employed vs. Employed
Self-employed individuals have different tax filing requirements compared to those who are employed by someone else. If you are self-employed, you must file taxes even if you earn a small amount of money. This is because self-employment income is subject to self-employment tax, which covers Social Security and Medicare taxes.
Minimum Income Threshold
While there is no specific minimum income threshold to file taxes, the IRS provides a general guideline based on your filing status. For the tax year 2021, the following income thresholds apply:
- Single: $12,550
- Married Filing Jointly: $25,100
- Married Filing Separately: $12,550
- Head of Household: $18,800
- Qualifying Widow(er) with Dependent Child: $25,900
Other Factors to Consider
Several other factors can affect your tax filing requirements, such as:
- Whether you had any taxable income
- Whether you had any