A while ago I asked a friend of mine “how much money do you have to make to file taxes?” He told me the scoop regarding the US tax laws and now I would like to share them with you… If you’ve been making money for a while online or otherwise at the end of the year you will most likely want to file taxes regardless of your income bracket.
Because most of the articles on this website focus on how to make money online for beginners, it seems only natural that this topic would have come up eventually and paying federal income taxes for your hard earned money is highly recommended. One of the best reasons why you should file your taxes every year is for the simple fact that you will have a written record of your income and earnings which will help you purchase a car, get credit cards or even take out a mortgage on your first home.
So, let’s get to the point shall we… What is the minimum income to file taxes?
Generally this answer differs depending on the following variables:
1.) Source of Income
2.) Filing Status
3.) Age
Most young people can get away with not filing if their gross income is less than $8,950.
If you are over 65 years old you can make a maximum earned gross income of $10,300.
Generally if you do decide to file anyways but you meet these conditions then you will probably not be required to pay. This is the option I would suggest because it will get you in the habit of filing taxes and you won’t be dependent on companies like Liberty Tax Services and H&R Block to take care of your paperwork and charge you a hefty fee for their services.
Let’s say that you were self employed for a portion of this income. The law then states that you will need to file if you have made $400 or more through self employment.
For people that make money online, this will make filing a mandatory situation every year…
Keep in mind that this information is current as of 2008 and tax laws tend to change on an annual basis, however I will try to keep this article current as I recognize that this is something we should all be aware of.
When you are younger the most typical form you will need to get from a local library or online is called a 1040EZ. When you get older and your financial situation becomes more complicated, most people upgrade to a 1040 form.
How do I know if I was self-employed?
If you’re job doesn’t require you to pay taxes but does require you to fill out a contract form such as a 1099 then this would be considered working as a self-employed member of the labor force.
If you have been working a job where they take taxes out automatically, you will most likely receive a statement called a W2 at the end of the year. This is the only information you will need to submit the appropriate paperwork unless you have worked as a self-employed individual or have investment income.
I personally like to file as soon as my W2 comes in the mail. Nowadays they make it extremely easy to go through the process online and they even offer a direct deposit option in regard to your return.
When is the deadline for filing my taxes?
Keep in mind, it’s possible to get an extension but definitely not recommended. The annual deadline to file is April 15th
Try your best to not procrastinate and get a jump on this because it feels much better if the task isn’t looming and distracting you from focusing on more productive efforts.
For a lot of people this can be a subject that causes many people anxiety, usually the people feel the most stress about this situation are the people that owe money to the government rather than the other way around.
What is the best way to go about filing?
Personally I would recommend that you use a free online service like TaxAct or TurboTax to handle your business. In the past this option has worked very well for me so I would highly recommend it.
This article is extremely long for an attempt at trying to answer the question:
How much money do you have to make to file taxes?
At this point you should be armed with all the information you need to make the best decision regarding this activity. It is something that most of us grudgingly do every year but it’s really easy once you go through the motions a few times!
