Do I Have to File Taxes if I Made Less Than $5000?

The terse response to this query is: it depends. Generally speaking, you might not be needed to submit a federal tax return if your annual income was less than $5,000. However, a few variables, including your filing status, age, and sources of income, may be relevant. Let’s examine the requirements for submitting taxes when you have a low income in more detail. Filing Requirements Based on Age and Filing Status Depending on your filing status and age, the IRS establishes various criteria for submitting tax returns. If your income was at least $12,400 in 2020 and you are single and under 65, for instance, you normally need to submit a tax return. The barrier rises to $14,050 if you are over 65, though. The filing threshold for married couples filing jointly in 2020 is $24,800 for those under the age of 65 and $26,100 for those over 65. Different Forms of Income The many sorts of revenue you got over the year must also be taken into account. The filing barrier does not apply to certain forms of income because they are not subject to federal income tax. These could consist of bequests, gifts, and particular forms of disability compensation. However, if you received money from a job or from self-employment, that income would be included in your filing threshold because it is often taxable. Square and Zelle. filing with the IRS

Let’s now address the pertinent queries regarding Square and Zelle. Users can send and receive money electronically using Square and Zelle, two payment processing providers. It’s vital to keep in mind that any revenue you get through these platforms would still be regarded as taxable income even though the companies themselves do not report transactions to the IRS.

For instance, even if you are a freelancer who does not utilize Square to record your client payments to the IRS, you would still need to disclose those payments on your tax return. In a same vein, money received through Zelle from friends or family may qualify as a gift and not be subject to taxation. However, you would have to declare that revenue on your tax return if you received payment using Zelle for goods or services.

In summary, if your annual income is $5,000 or less, you might not need to file a tax return, but it’s necessary to take into account your filing status, age, and the different sources of income you got that year. Additionally, even if the companies themselves do not report the transactions to the IRS, any revenue earned through payment processing services like Square or Zelle should still be declared on your tax return. If you are unsure of your filing obligations, it may be beneficial to speak with a tax expert or make use of the Interactive Tax Assistant tool provided by the IRS.