When Can I Refuse to Pay Income Tax?

How high of an income do I have to make in order to not pay income tax? That depends on your gross income, filing status, age, and dependency on other taxpayers. The maximum earning before paying taxes for a single person younger than 65 is $10,400, while the line for those older than 65 is drawn at $11,950.

How Much Money Can I Make and Not Pay Taxes?

Does everyone need to pay taxes? The answer is – no, but you should consider these five essential factors that determine whether you need to pay them:

  • Age
  • Dependents
  • Gross income
  • Filing status
  • Whether you are blind

The amount of income tax that you’ll need to pay depends on your income (based on the progressive income tax system). In other words, the higher the income, the more money you will have to pay. If your income equals or exceeds the amounts determined by the IRS, you are obliged to pay taxes. You can find these tables in Publication 501 and Publication 17 on the official IRS website (these tables are updated each year).

Requirements for Dependents

Taxpayers who are dependent on other taxpayers have to meet different requirements for filing taxes. Dependents include people who are permanently disabled, along with qualifying relatives or children under the age of 19. Taxes have to be filed when their income is higher than their standard deduction. When a dependant’s income comes from sources such as interest and dividends, it is considered unearned.

If you are single, under the age of 65 or olde,r or blind, you must file taxes if:

  • Earned income was more than $6,350
  • Unearned income was more than $1,050
  • Both earned and unearned income together exceed more than the larger of $1,050 or a total earned income up to $12,000 (plus $350)

If single, aged 65 or older, or blind, you must file a tax return if your earned income was more than $7,600 ($8,850 if you are both 65 or older and blind) or unearned income was higher than $2,600 ($4,150 if you are both 65 or older or blind).

Those married, under the age of 65, or blind must file a return if their earned income was more than $6,350 or unearned income was more than $1,050. Married dependents aged 65 or older or blind have to file a return when earned income exceeds $7,600 (8,850 if you’re both 65 or older and blind), and unearned income exceeds $2,300 ($3,550 if you’re both aged 65 or older or blind).

How Much Can Small Businesses Earn before Paying Taxes

Regardless of the profit or loss, small business owners must pay taxes on their income. As for the tax return that they must file, it all depends on their business structure. For example, freelancers must pay self-employment taxes for income higher than $400. If you have a partnership or sole proprietorship, you have to file the T1 income tax form. If you are a sole proprietor with net income greater than $400, you have to file Schedule C, Schedule SE, and IRS Form 1040.

Regulations for reporting small business income and self-employment taxes for non-profit workers, clergy, ministers, and government employees are different. For example, if you work for a non-profit organization or church, you need to file a tax return for earnings over $108.

If you are not required to file Form 1040 for the federal tax return, it doesn’t mean you’re excused from filing local and/or state income tax returns. Before concluding that you’re in the clear, be sure to check on that.

If you need help with determining whether you should pay income tax or not, Golden Tax Relief is there to give you a hand. Contact us, and our legal experts will explain your rights to you and help you resolve any issues with the IRS to ensure the best possible outcome.

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