What do you think the minimum is that you need to earn in order to have to file an income tax return in 2023?
$4000? 8000? $15000?
Here’s a chart for Federal filing requirements:
| Filing Status | Age at December 31, 2023 | Gross Income |
| Single | Under 65 | $12,950 |
| 65 or older | $14,700 | |
| Married Filing Jointly | Under 65 (both) | $25,900 |
| 65 or older (both) | $28,700 | |
| Married Filing Separately | $5 | |
| Head of Household | Under 65 | $19,400 |
| 65 or older | $21,150 | |
| Qualifying Widow(er) | Under 65 | $25,900 |
| 65 or older | $27,300 |
Does this mean that if I’m a freelancer and single, I don’t have to file if my gross income is less than $12,950? No.
If you are a freelancer, the minimum you need to file a tax return is none of the above. The amount of money you need to earn and to file a tax return is $400. Yes. That is not a misprint. It is $400.
To be clear, this is not true of the group of people who call themselves freelancers and who are paid on W-2’s. It is true for the freelancers who get paid for the whole amount they earn, do not have any taxes withheld, and have or should have their income declared on a 1099.
Why is the number $400? While you may not owe any income taxes, as a freelancer, you must pay self-employment taxes in addition to regular income taxes. Self-employment taxes start if you earn $400 or more. Therefore you must file a tax return if you gross $400 or more.
If you have business expenses that should be taken into account, do not expect the IRS to know that. You must file a Schedule C or Schedule C-EZ that indicate your expenses. That way it may be that you don’t owe any self-employment taxes.
For example, you earned $5600 as a freelancer but you had $5300 of expenses. Your net is $300. As a result, you wouldn’t owe any taxes, either income taxes or self-employment taxes. You must, however, file your returns because you grossed $400 or more. If you don’t, you could well get a letter from the IRS with a bill and a request for an explanation for why you shouldn’t owe this money. I believe it’s better to file the return and avoid the correspondence.
If you earned $5600 and had $4600 of expenses, your net is $1000. You wouldn’t owe any income taxes but you would owe self-employment taxes and would have to file a tax return.