If You Made Less Than $25,000 in One Year, Do You Have to File Taxes?

by K.A. Francis ; Updated March 15, 2018

Tax season is fast approaching and you might be wondering if you made enough money to file. You know you made less than $25,000, so does that mean you have to file a tax return on your income? According to the Internal Revenue Service, if you made less than the standard deduction plus one exemption, and you cannot be claimed as a dependent by someone else, you generally don't have to file because your tax burden would be zero. However, even if you legally don't have to file, there are reasons you might want to file anyway.

Examine All the Factors Regarding Filing

Just because you made less than $25,000 doesn't mean you are exempt from filing taxes. Depending on your filing status, dependent status and other factors, filing a return with the IRS could be required. On the flip side (and a more positive note), you could also be eligible for a refund of any taxes you paid.

Check to See if Taxes Were Taken From Your Paycheck

Even the smallest amount of income is taxable so even if you made less than $25,000, you most likely paid federal income tax. Check your pay stubs for federal deductions. These should say "FED TAX" or "Federal Tax." This total is the amount the federal government withheld from your paycheck for federal taxes.

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Did You Receive a W2?

If you received a W2 from an employer, then you should file a tax return. If you received a paycheck from an employer, per the IRS the employer is required to report this payment to the government and send you a W2. Not filing a return when you receive a W2 is ill advised since the IRS will know the employer sent you one. This advice also applies if you worked as a contractor and a client sent you a 1099. If you earned $600 or more, your client is required to send you a 1099. It would be in your best interest to file taxes even if you only made $600.

Do You Have Taxable Income?

Making less than $25,000 in income does not mean you didn't have taxable income. If you had a job and collected a paycheck during the year, that money was most likely taxed. Even if only one dollar was taxable, you are required to file taxes on that dollar. Tax on $25,000 a year falls within the two lowest tax brackets, regardless of your filing status. These are the brackets for the 2018 tax season according to the IRS:

Single/Married Filing Separately:

  • Taxable income = $0 - $9,525: 10 percent
  • Taxable income = $9,526 - $38,700: $952.50 + 15 percent of the amount over $9,525

Married Filing Jointly:

  • Taxable income = $0 - $19,050: 10 percent
  • Taxable income = $19,051 - $77,400: $1,905 + 15 percent of the amount over $19,050

Head of Household:

  • Taxable income = $0 - $13,600: 10 percent
  • Taxable income = $13,601 - $51,850: $1,360 + 15 percent of the amount over $13,600

If you made $20,000 last year and had exemptions and credits that totaled $5,000 and your filing status is single, your taxable income would be $15,000 and subject to taxes in the amount of $1,174. Let's look at this calculation:

  • $20,000 - $5,000 = $15,000, your taxable income
  • $15,000 - $9,525 = $5,475, the amount over $9,525 per the table above (single)
  • $5,475 x 15% = $821.25, 15 percent of the income over $9,525
  • $821.25 + $952.50 = 1,173.75 (rounded to $1,174), $952.50 plus 15 percent of the amount over $9,525

For example, if you paid $2,500 in federal taxes, then you could be entitled to a refund for the difference of $1,326 ($2,500 - $1174 = $1,326) .

Do Your Taxes and See What Happens

Even if you believe you aren't required to file a tax return, you could still be entitled to a refund. Completing your tax return using your preferred tax app is a good way to know if you need to file, and if not, if you're entitled to a refund.

About the Author

K.A. Francis is a freelance writer with over 20 years experience, and a small business consultant and jewelry designer. She holds a Bachelor of Arts in English and business administration and a Master of Arts in Adult Education. She has written for "The Einkwell," "Windsor Parent," MomsOnline, Writer's Stew, Lighthouse Venture Group and others. Her jewelry design company, KAF Creations, has been in operation since 1998.

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