What is the Minimum Income to File Taxes?
What is the minimum income to file taxes? You might think the answer would be a single penny, but it is actually higher than that.
There is a concept known in investing as return on investment. To the surprise of many, the IRS also follow it as does the federal government. Okay, the feds aren’t particularly good at it, but they do at least try.
When it comes to collecting taxes on income, return on investment is applied as well. Specifically, the issue is how much value is there in hunting down someone who made $5,000 in income and didn’t pay taxes? There really isn’t much, so why do it? With this in mind, the government sets minimums on the amount of income you can earn before tax returns have to be filed. The amounts as of the 2008 tax year are as follow for the various filing status. If you made the indicated dollar amount or more, you must file a return.
- single - under 65 - $8,950
- single - 65 or older $10,300
- married filing jointly - under 65 (both spouses)- $17,900
- married filing jointly - 65 or older (one spouse) - $18,950
- married filing jointly - 65 or older (both spouses) - $20,000
- married filing separately - any age - $3,500
- head of household - under 65 - $11,500
- head of household - 65 or older - $12,850
- qualifying widow(er) - under 65 - $14,400
- qualifying widow(er) - 65 or older - $15,450
Before you get carried away with these numbers, keep in mind you are far better off if you file a tax return every year. Why? Well, let’s assume you make and file returns for 10 years. You don’t file a return in the 11th year because you don’t make enough. In the 12th year, however, you start making more money and filing returns.
What is going to happen?
The IRS is probably going to audit you! Why? Well, it is going to want to know what happened in that 11th year! Having gaps in the years you filed returns, particularly if you are an adult, is just asking for attention from the agency. Few people desire to bathe in that light!