Understanding the Minimum Income Threshold for 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?” The answer to this question can vary greatly depending on several factors, including your filing status, age, and whether you are claimed as a dependent on someone else’s tax return.
Filing Status and Age
Your filing status plays a significant role in determining the minimum income threshold for tax filing. For example, if you are single and under the age of 65, you generally need to have earned at least $12,950 in 2021 to file a federal income tax return. However, if you are married filing jointly, the threshold increases to $25,900 for the same year.
For those who are 65 or older, the minimum income threshold is higher. For example, if you are single and over 65, you need to have earned at least $14,700 in 2021 to file a tax return. For married couples filing jointly, the threshold is $27,300, and for married individuals filing separately, it is $14,700.
Dependents and Tax Filing
Being claimed as a dependent on someone else’s tax return can also affect your minimum income threshold. If you are claimed as a dependent by a parent or guardian, you may not need to file a tax return if your earned income is less than the standard deduction amount for your filing status.
For example, in 2021, the standard deduction for a single filer was $12,550. If you were claimed as a dependent and earned less than this amount, you would not be required to file a tax return. However, if your earned income was between $12,550 and $14,200, you would be required to file a tax return to claim the earned income tax credit (EITC) or other tax benefits.
Earned Income Tax Credit (EITC)
The EITC is a tax credit for eligible individuals who have earned income, such as wages, salaries, and self-employment income. The amount of the credit depends on several factors, including your filing status, age, and whether you have qualifying children.
In 2021, the minimum income threshold for the EITC was $21,430 for married couples filing jointly with no children, $15,980 for single filers with no children, and $50,162 for married couples filing jointly with three or more qualifying children. If your earned income is below these thresholds, you may still be eligible for the EITC, depending on your other qualifications.
Self-Employment and Tax Filing
Self-employed individuals may have different income requirements for tax filing. Generally, if you are self-employed and earn income from a business or profession, you must file a tax return if your net earnings from self-employment are $400 or more.
It’s important to note that self-employment income is subject to self-employment tax, which covers Social Security and Medicare taxes. Even if you do not owe income tax, you may still be required to file a tax return to pay self-employment tax.