- Not everybody is required to file a tax return.
It really depends on your age, filing status,
the type and the amount of income that you have.
So how much do you have to make in order to file your taxes?
I'm covering the answer to that question in this video.
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Hey guys, welcome back to The College Investor,
Investing and Personal Finance for Millennials.
Today we are partnering with TurboTax on this video.
Be sure to check out our complete tax software review
of TurboTax and we wanted to cover the question,
how much do you actually need to make
in order to file your taxes?
It really does depend on a variety of factors,
so let's hop into that.
First, you need to know the standard deduction.
If your income within the past year
was less than the standard deduction,
you typically don't need to file a tax return.
Now, a standard deduction for somebody filing single
is $12,200, head of household is $18,350,
married filing separately is also $12,200
and married filing jointly is $24,400.
So for someone who is making less in income
than the standard deduction, then your taxable income
would be zero, so therefore you would not have to file
a tax return because you don't owe any taxes.
Next, you'll also need to know
what the income filing thresholds are,
so for the lowest tax bracket in 2019,
here's what that looks like.
At 10% singles and married filing separately
is up to $9,700, married filing jointly is up to $19,400
and heads of household is just under $14,000.
So to understand how tax brackets work
with the standard deduction, let's say a 27 year old person
earned $8,500 in income in the last year,
that means their total taxable income
is less than zero, which means they don't have any income
that can actually be taxed.
Next, ask yourself if you are a dependent.
Now parents can claim their children as dependents
up until the age of 19.
If they continue their education, parents can claim children
as a dependent up to the age of 24.
Now if you are a single dependent under the age of 65,
then your tax filing situation
will depend on three different things: earned income,
unearned income and gross income.
And those numbers are $1,052 in unearned income,
$12,001 in earned income
and your gross income was either larger of $1,050
or earned income up to $11,650 plus $350.
You'll also want to check on social security benefits.
This really only applies to seniors,
so if you are receiving social security benefits,
that's not included as taxable income
so therefore it's not taxed.
Now the situation does change if you're married
to somebody who's 65 years and older,
in that case if you have a combined income
of more than $27,000 then you must file a tax return.
There are certain situations which would require you
to file a tax return and that is if you are self-employed
and you earned $400 or more
through your self-employed business,
if you paid on a 1099-Miscellaneous form,
or if you bought health insurance
from a state or federal marketplace.
In any of those situations,
then you're most likely going to need to file a tax return.
Now if you're still unsure if you should file a tax return,
it's best to talk to a tax professional.
You could avoid potential filing mistakes and penalties.
Even if you have fallen under a situation
in which you don't have to file a tax return,
you may still want to file it because if you have,
let's say a part-time job where you earned some money
and you were paying taxes on that job,
you could potentially get that money back
in your tax return.
The best thing to do is file your taxes
using a really good tax software like TurboTax.
You could end up filing for free,
so be sure to check them out
and our complete video walk-through
of TurboTax tax software on thecollegeinvestor.com.