How much money can you make before you have to pay taxes? This is one of the first questions freelancers ask – and one of the most important before you start working freelance. Having an answer to this question will make it very easy for you to manage your expectations and determine how much you’re going to earn as a freelancer. This will also help you assess whether freelancing is the right path towards your career and financial stability.
This article can help you come up with answers to these questions – learn more in this freelancer finance guide!
Freelance taxes can be complicated and confusing for anyone other than a tax professional. That’s why you need to do as much research as possible before you begin earning income. Otherwise, you run the risk of getting audited and penalized for filing taxes incorrectly. This is not a boat you want to be in. When this happens, you’ll end up paying the penalty and fines, causing more expenses from your pocket. Instead of earning money, you’ll end up losing them.
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We’re here today to provide some simple answers to the question of how much money can you make before you have to pay taxes. Keep reading to learn more.
How Much Money Can You Make Before You Have to Pay Taxes?
The minimum income to file taxes depends on a few different factors, such as your filing status and age. For example, the amount of a seafarer’s tax will be different when you’re head of the household, single or married filing jointly.You need to know this information before you can access a paystub creator if you are trying to prove your income for any reason.The more information you have, the easier it’ll be for you to file your taxes.
As mentioned, your filing status is one of the most important factors to consider before filing taxes. In fact, knowing what your status is should be on top of your to-do list before you file your taxes.
Each threshold for income is as follows:
Head of Household
If you are under 65 years of age, you must earn at least $18,000 before having to file taxes. If your income is lower than this amount, you don’t have to worry about filing your taxes or paying for penalties.
This amount increases to $19,600 if you are over the age of 65.
Single
Single individuals can earn at least $12,000 under age 65 and $13,600 if you are over age 65 before having to file taxes.
Married Filing Jointly
For married couples filing jointly, the minimum threshold for income is only $24,000. If you are over age 65, the requirement is $16,600.
Married Filing Separately
It may be a penalty to file separately if you are married because the minimum income earned can be no more than $5 before you have to file taxes.
Qualifying Widower
Widowers under the age of 65 will only have to file taxes after they earn at least $24,000. Qualifying widowers over the age of 65 must earn at least $25,300.
What About Students?
How much do you have to make to file taxes if you’re a student and/or dependent? This situation is where things get complicated. If you’re currently a student and don’t want to have any problems with your taxes, it’s important to do thorough research about the subject. You can also pay for the services of a financial advisor to make the process easier for you. Unlike other statuses, students will have to consider several variables before they can file taxes.
Your parents can claim you as a dependent up until age 24 if you are in school.This means that when you are 24 years old or below, your parents will have to file your taxes on your behalf. This can mean less stress for you.Otherwise, the cutoff age is 19. The trick is that you may still be able to file taxes and even take deductions depending on your status as a student. Your parents, however, cannot take deductions on your behalf.
As a student, it may be wise to have your taxes prepared professionally to avoid submitting incorrect documentation.Paying for the services of a professional will save you and your parents from a lot of stress in filing taxes. This will also prevent anyone in the family from paying penalties and fines due to incorrect documentation.
Final Thoughts
So, how much money can you make before you have to pay taxes?
The simple answer is $12,000 for single individuals and $24,000 for married couples filing jointly. Keep in mind that these are general incomes for filing taxes under the age of 65 which is still considered retirement age.
It’s important to keep these numbers in mind as you earn income throughout the year so that you can save enough to pay your taxes each quarter or at the end of the year.
We hope you found this post helpful and invite you to check back for more informative posts about your financial health.