How much money you must earn before you have to file and pay federal taxes depends on several factors, including your filing status, age, adjusted gross income (AGI) and whether or not you are a dependent of another taxpayer. An additional factor that triggers tax filing requirements is if you purchased a medical insurance plan through the federal marketplace.
Depending upon your current filing status, the amount of money you can make without being required to pay federal taxes can vary significantly.
Minimum Income To File Taxes
For the tax year 2018, the following figures are the maximum earnings before paying tax:
- Single, under age 65: $12,000
- Single, over age 65: $13,600
- Head of household, under 65: $18,000
- Head of household, over 65: $19,600
- Married filing jointly, both spouses under 65: $24,000
- Married filing jointly, one spouse 65 or older: $25,300
- Married filing jointly, both spouses over 65: $26,600
- Married filing separately, all ages: $5
- Qualifying widow or widower, under 65: $24,000
- Qualifying widow or widower, over 65: $25,300
Dependents Claimed on Another's Return
Dependents are children or other relatives claimed on federal income tax forms. For IRS purposes, the dependent is a “qualifying” child or relative. Qualifying children are under age 19 at year’s end or 24 if a full-time student who lived with you at least half the year. A child of any age who is permanently disabled is also a qualifying child. A qualifying relative is either someone who lives with you year-round or is considered a member of your household. Relatives who do not live with you may qualify based on the familial relationship between the two of you. Cousins do not count as relatives for qualifying dependent purposes, but former in-laws may qualify, as the IRS recognizes that relationships between other family members do not necessarily end at divorce or death.
If a dependent has unearned income, such as interest and dividends, he must file a tax return if the unearned income is greater than:
- Single, under 65 and not blind: $1,050
- Single, 65 or older and not blind: $2,600
- Single, 65 or older and blind: $4,150
- Married, under 65 and not blind: $1,050
- Married, 65 or older and not blind: $2,300
- Married, 65 or older and blind: $3,550
For earned income by dependents, amounts above these limits require filing a federal tax return:
- Single, under 65 and not blind: $6,350
- Single, 65 or over and not blind: $7,900
- Single, 65 or over and blind: $9,450
- Married, under 65 and not blind: $6,350
- Married, 65 and older and not blind: $7,600
- Married, 65 and older and blind: $8,850
Self-Employment Tax Return
No matter whether you call yourself an independent contractor or a sole proprietor, if you are self-employed you must file a federal income tax return if you make at least $400 during the tax year. As a self-employed person, you must pay your Social Security and Medicare taxes out of pocket. This rate is 12.9 percent for Social Security and 2.9 percent for Medicare of your net earnings, not AGI. This holds true whether or not you have to pay federal income taxes.
Healthcare Marketplace Plans
Even if you aren’t required to file federal taxes based on your AGI, you must still file a tax return if you purchased healthcare through a federal marketplace. That’s true whether you bought a plan using premium tax credits or paid the full price for your coverage. Don’t file your taxes until you receive Form 1095A from Healthcare.gov. Make sure all the information on the form is correct before filing. If there is an error, contact the marketplace call center at Healthcare.gov. If the information is correct, use your Form 1095A to reconcile any difference between the amount you qualified for in tax credits and the amount you actually used.
- IRS: Filing Requirements 2
- IRS: Publication 501 Cat. No. 15000U Exemptions, Standard Deduction, and Filing Information
- IRS: Topic Number 554 - Self-Employment Tax
- Healthcare.gov: Email Print 2017 health coverage & your federal taxes
- IRS: Publication 929 (2017), Tax Rules for Children and Dependents
- Efile: Do You Have to File a 2018 Tax Return?
A graduate of New York University, Jane Meggitt's work has appeared in dozens of publications, including Sapling, Zack's, Financial Advisor, nj.com, LegalZoom and The Nest.