If you make less than $13,850 a year, you’re told you don’t need to file taxes. But if you’re earning even $400 a year from gig or self-employment work, you apparently have to file. If you made $10k, which is under the poverty line, do you still need to file because it counts as gig work? What’s the deal?
IRS says you don't have to file if under $13,850 a year... but what about gig or self-employed work?
I work as a CPA. The rule about earning less than $13,850 applies to regular W-2 wages. For those, taxes like Social Security and Medicare are automatically taken out by your employer. But if you’re self-employed and make more than $400, the government expects you to pay Social Security and Medicare taxes on that income, since there’s no employer to handle it for you.
Greer said:
@Chen
Exactly. Even if you’re under $13,850, it’s often a good idea to file your taxes anyway.
My kids, who are 18, make way less than $13,850. They get W-2s for their part-time work. Do they really need to file? I always thought they didn’t.
@Tatum
Did their paychecks show any federal tax withholding? If yes, they should file to get that money refunded. Filing can also be good practice, especially if they plan to contribute to a Roth IRA or just to prevent identity theft.
@Marsden
Adding on to this: filing with a W-2 is super easy and free on platforms like FreeTaxUSA. Plus, if they’re owed a refund, why not get it?
Tatum said:
@Marsden
Thanks for explaining. I’ll make sure they file next time.
If you’re claiming them as dependents, make sure their return reflects that. Otherwise, you might run into issues with rejected returns.
@Sullivan
Good point! There’s a specific checkbox on their return for this. It’s important to mark it, whether you actually claim them or not.
Blair said:
@Sullivan
Good point! There’s a specific checkbox on their return for this. It’s important to mark it, whether you actually claim them or not.
Exactly. Thanks for clarifying!
Tatum said:
@Marsden
Thanks for explaining. I’ll make sure they file next time.
Filing also helps track their Social Security work credits. Plus, contributing even a small amount to a Roth IRA can make a big difference later.
@Joss
Starting a Roth IRA early is smart. Even a small contribution now can grow tax-free over time.
Tatum said:
@Marsden
Thanks for explaining. I’ll make sure they file next time.
Filing also starts the statute of limitations for audits. Better to get that clock ticking.
Tatum said:
@Marsden
Thanks for explaining. I’ll make sure they file next time.
Also, if they qualify for Free File, they can use FreeTaxUSA for free federal filing.
Tatum said:
@Marsden
Thanks for explaining. I’ll make sure they file next time.
Also, if they qualify for Free File, they can use FreeTaxUSA for free federal filing.
It’s a good way to learn the tax process early on.
Tatum said:
@Marsden
Thanks for explaining. I’ll make sure they file next time.
If you can afford it, you could contribute to their Roth IRA based on their earned income. Filing their taxes helps document this.
Tatum said:
@Marsden
Thanks for explaining. I’ll make sure they file next time.
Filing ensures they don’t miss out on refunds. FreeTaxUSA is a great option for simple returns.
Tatum said:
@Marsden
Thanks for explaining. I’ll make sure they file next time.
Filing even when you don’t have to can pay off. For instance, during the pandemic, previous tax filings helped us qualify for stimulus checks.
@Marsden
Identity theft is no joke. Filing can help prevent someone else from using their Social Security number.