How Much Do I Have to Make To File Taxes
Tax season is here and almost gone, but for some, there is the lingering question of “Do I need to file a tax return?” Unfortunately, as we’re dealing with taxes, the answer is, it depends on these five questions:
- How old are you?
- What is your filing status?
- Are you blind?
- What is your gross income?
- Is someone else claiming you as a dependent?
Even with these answers, you may still have some questions. Gross income is your income amount before you take any deductions or tax credits. How do you know if you are a dependent? Here are the rules:
1. The person cannot be the qualifying child of anyone else
2. The person must have lived with you all year.
3. The person’s gross income for the year must be less than $4,050
4. You must have provided more than half of their total support during the calendar year.
Disclaimer: The following information is based on the 2020 tax year.
How Much do you Have to Make to File Taxes?
Here are the minimum salary requirements based on filing status for tax year 2020. Note: these amounts do change each tax year, so be sure to check the tax bracket before filing each tax year.
Filing Status | Age | Minimum W-2 Income | Minimum Self-Employment Income |
Single | Under 65 | $12,200 | $400 |
Single | 65 or older | $13,850 | $400 |
Head of Household | Under 65 | $18,350 | $400 |
Head of Household | 65 or older | $20,000 | $400 |
Married Filing Jointly | Under 65 (both spouses) | $24,400 | $400 |
Married Filing Jointly | 65 or older (one spouse) | $25,700 | $400 |
Married Filing Jointly | 65 or older (both spouses) | $27,000 | $400 |
Married Filing Separately | Any age | $ 5 | $400 |
Qualifying Widow(er) | Under 65 | $24,400 | $400 |
Qualifying Widow(er) | 65 or older | $25,700 | $400 |
If you are a dependent, your minimum salary requirements differ as you need to include earned income, unearned income (royalties, dividends, stocks, for example) and gross income. As above, the minimums for these amounts will be determined by your age and if you are blind.
How much do you have to make to file taxes if you are claimed as a dependent?
Here are the minimum salary requirements if you are claimed as a dependent based on filing status for tax year 2020. Note: these amounts do change each tax year, so be sure to check the tax bracket before filing each tax year.
Single dependents under 65 and not blind:
- Earned income exceeds $12,200
- Unearned income exceeds $1,100
- Gross income was more than the larger of either $1,100 or earned income up to $11,850 plus $350
Single dependents 65 years or older or blind:
- Earned income exceeds $13,850
- Unearned income exceeds $2,750
- Gross income was more than the larger of either $2,750 or earned income up to $11,850 plus $2,000
Single dependents 65 years or older and blind:
- Earned income exceeds $15,500
- Unearned income exceeds $4,400
- Gross income was more than the larger of either $4,400 or earned income up to $11,850 plus $3,650
Married dependents under 65 and not blind:
- Earned income exceeds $12,200
- Unearned income exceeds $1,100
- Gross income was $5 or more and your spouse files a separate return and itemizes deductions
- Gross income was more than the larger of either $1,100 or earned income up to $11,850 plus $350
Married dependents 65 years of older or blind:
- Earned income exceeds $13,500
- Unearned income exceeds $2,400
- Gross income was $5 or more and your spouse files a separate return and itemizes deductions
- Gross income was more than the larger of either $2,400 or earned income up to $11,850 plus $1,650
Married dependents 65 years of older and blind:
- Earned income exceeds $14,800
- Unearned income exceeds $3,700
- Gross income was at least $5 and your spouse files a separate return and itemizes deductions
- Gross income was more than the larger of either $3,700 or earned income up to $11,850 plus $2,950
As a note, if you take the standard deduction, you cannot itemize your deductions.
How Can I Get an Earned Income Tax Credit?
The Earned Income Tax Credit is a refundable credit and is a benefit for working people with low or moderate income. For tax year 2020, the earned income tax credit ranges from $538 to $6,660. This credit changes depending on your filing status and how many children you have, however, you could qualify even if you do not have children.
To learn more about the Earned Income Tax Credit (EITC) and see if you qualify, visit the link to the IRS website.
Should I File a Return Even If I Don’t Have To?
As outlined above, if your salary is less than listed for your filing status, then you do not need to file. However, you could be missing out on a refund, so there are a few possible reasons to file even if you fall below the minimum requirement line:
- You may have had some tax withheld either from a paycheck or other source. To collect this amount, you will need to file a return in order to receive the refund.
- You made at least $400 in self-employment income.
- You may qualify for tax credits
- You may have made some estimated tax payments.
- If this is the first year you would not be filing a return, doing so could protect you from an audit as filing a return starts the clock on three years the IRS has to begin the auditing process.
Do Students Have to File Taxes?
If you are student who is claimed as a dependent, you do not need to file a tax return if you have earned less than $12,200, the same as the dependent tax information we outlined previously. So, you will need to file a return if your:
- Earned income exceeds $12,200
- Unearned income exceeds $1,100
- Gross income was more than the larger of either $1,100 or earned income up to $11,850 plus $350
- Your business or self-employment net income is at least $400
How Can I File a Tax Return?
Upon review of the information listed in this article you find there is a need to file, you should file a Form 1040, or 1040-SR if you are above the age of 65. You can obtain these forms from the IRS website. Taxes can be confusing and if there are every any questions, it’s best to reach out to a tax professional who are skilled in tax preparation and up to date on all the new tax changes and laws.
New York State Tax Rate | NY State Tax Rates
Tax Relief Solutions for New York State
The State of New York is among one of the highest tax rates in the Nation. The only states currently higher are California, Oregon, Hawaii and Minnesota.
As with many Americans, attempting to figure out your taxes is tiresome with all the brackets and cumbersome if you’re not sure what to look for. So, if you are moving or thinking of relocating to the State of New York, hopefully this will help shed a little light on taxes. As with any tax, it’s always a smart choice to reach out to a professional tax preparer as they are familiar with rates, what to expect, etc.
Finally, New York imposes all three major state taxes: income tax, sales tax, and property taxes.
New York State Income Tax
New York State income tax rates in 2020 range from 4% to 8.82% depending on your income and filing status. Now, if you choose to reside in New York City, you will also need to pay a local tax as the City imposes its own tax on top of the State tax.
Those rates range from 3.078% to 3.876%. NY State Tax Tables is a good place to start. These tables provide a tax calculator and other questions you should answer to assist in finding out which bracket you fall under. Using this resource will assist you in knowing if you will receive a refund or expect to pay some tax. If you do expect to owe, this site will also update you on what penalties you could expect for late payments.
The State of New York shows tax table according to your filing status and income level. So, if you are Single and earn $8,500 or less, you can expect to pay 4%. If you are Married Filing Joint and earn $17,150 or less, you can also expect to pay 4%. On the other side of this table, if you are Single and earn over $1,077,550 you can expect the top tax bracket of 8.82%. If you are Married Filing Joint and earn $2,155,350 you can also expect to pay 8.82%. The State does provide a quick calculator where you enter in your income, filing status and dependents and it will provide a general amount you could expect to owe in tax. It’s not perfect, but a lot better than not knowing and then paying penalties and interest on top of what you owe.
New York State Sales Tax
The State of New York has a Sales and Use Tax Rate. Sales Tax applies to retail sales of tangible (real) personal property and services. Use Tax applies if you buy these tangible items and services outside the State but use it within the State of New York.
There are two sales tax rates to be aware of; one for New York City and one for New York State. If you are shopping and purchase clothing items or shoes and spend under $110, there is no sales tax. However, if you spend more than $110, New York City is 4.5% Sales Tax and 4% in New York State Sales Tax.
If you are purchasing personal property like furniture or electronics, utility services like gas, electricity, telephone, using a cleaning service or buying an admission to a place of amusement like a park or theater, the City Sales Tax rate is 4.5%, the State Sales and Use tax is 4%, the Metropolitan Commuter Transportation District surcharge of 0.375% = a Sales and Use Tax of 8.875%.
Next are services, such as barbers, nail salons, tanning parlors and fitness clubs, there is a City Sales Tax rate of 4.5% on the service, but there is no State Sales Tax. However, if your purchase any products at these establishments, an $8.875% combined City and State tax will be charged.
If you choose to reside in Manhattan, the Sales and Use taxes are extensive. For example, if you own a vehicle registered in Manhattan, you could pay a tax rate of 18.375% for parking, garaging, or storing your vehicle. Some may qualify for a Manhattan Resident Parking Tax exemption which would reduce this rate by 8%, therefore you are only paying $10.375%. Before moving into Manhattan, you may want to check to be sure you are eligible for this reduced rate.
New York State property tax
Property taxes are confusing no matter which state you reside. Oddly enough, the property tax in New York City is lower than the State at just .090%, while the State average is 1.68%. The best place to start is here at the State of NY Online Resource. This guide will help you navigate the rates, assessed values by county and exemptions.
The tax rates, as with most states, are applied to the assessed value of your home. The rates you will find on your real estate tax bill, include county, city, school district and possibly special rates to fund projects like parks. The rates are recalculated each year, and my increase or decrease depending on the rate of inflation, but it won’t necessarily change the amount that much. For example, if you reside in New York County, the average home value is $915,300 with a tax rate of 0.90%, so you could expect to pay $8,237 in taxes. Even though this County has the lower rate, the homes are more expensive per square foot thereby you end up paying more. Another example is if you live in Westchester County, the average home value is $513,300, with a rate of 1.95%, so you could expect to pay $10,000 in taxes.