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I am wanting to run my own small business out of my home, do I have to pay any taxes <$400? Also disabled and receive SSI.

Hello, 

I am a young disabled adult who wants to create and run my own handmade jewelry business out of my home. 

It will be a sole proprietorship and will be an online store (I will build my website and do all updates/upkeep myself). 
I receive SSI for my disability (I know I have to report my earnings to SSA when I start to earn). I do not pay for Medicare through a government program. I live in an "apartment" that is part of the home my parents own, and I pay rent to them (don't know if it is relevant or not). 

I know that I will have to pay self-employment taxes if net earnings are $400 or more. I also know I have to pay taxes on income in general. 

 

My question is, does the IRS require an income tax form for any amount, or is there a minimum threshold? 

 

I appreciate any help you can provide.

 

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1 Reply

I am wanting to run my own small business out of my home, do I have to pay any taxes <$400? Also disabled and receive SSI.

In most cases, you would not need to file a tax return if your total income (not including SSI) is less than $400.

 

You would first want to analyze if it actually is a business.  If you are expecting your income to be that low, it leads to the thought that it MIGHT be a hobby (you can Google something like "IRS business vs hobby").  If it is a business, then if your business PROFIT (after expenses) is $433 (give or take $1, depending on rounding) or more, you will likely need to file a tax return to pay self employment tax. 

 

If you need to file a tax return, you'll need to also analyze if your parents are eligible to claim you as a dependent, and if they are, make sure that is mentioned on your tax return.

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