What is the minimum income for a dependent to file taxes?

[confuseddependent]

Hi, I made some income over the past year and I've never done taxes before.  I'm a dependent that my parents claim on their taxes. I am over 18, so I'm wondering what rules apply to me. I made approximately 900 dollars in 2021. Is that enough that I need to file taxes? I'm hoping someone can explain this very easily to me because I have no idea if I need to file taxes.

[Hal_Al]

Q.  I made approximately 900 dollars in 2021. Is that enough that I need to file taxes?

A. No. 

Your parents do not report your income on their tax return. If it has to be reported, at all, it goes on your own return. A dependent  must file a tax return for 2021 if he had any of the following:

1.          Total income (wages, salaries, taxable scholarship etc.) of more than $12,550 (2021).
2.          Unearned income (interest, dividends, capital gains, unemployment) of more than $1100.
3.          Unearned income over $350 and gross income of more than $1100
4.          Household employee income (e.g. baby sitting, lawn mowing) over $2300 ($12,550 if under age 18)
5.          Other self employment income over $432, including money on a form 1099-NEC

Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.

[JillS56]

No, based on what you told us you do not have to file taxes unless there were federal taxes withheld from the income you earned and you would want to file to get back whatever federal withholdings were taken.   

Typically, you do not need to file unless you make more than the standard deduction for a single person is $12,100.   But if you are dependent and you are a student you would only file if you made more than the $12,100 or there were federal tax withholdings.  You would be filing to get those withholdings back.   You would want to make sure you check the box that says you are being claimed by someone else.  

Once you reach the age of 19, are no longer a student, and have an income of more than $12,100 you would need to file a tax return.   At this point, you would need to have a conversation with your parents.   Technically, if you are no longer a student your parents are not entitled to claim you as a dependent.   If you file claiming yourself and your parents file claiming you as a dependent, it would delay the processing of both your return and your parent's return.

For this year though, you do not have to file a return.

[confuseddependent]

Thank you for the helpful reply. I'd like to know if you can answer this additional question: if I have receipts from craft machines and shipping materials that I purchased last year for my business, can I claim these as deductions even if I did not make income from my business? I have a sole proprietorship for it, but I never started selling stuff, as I was still prepping. 

[MayaD]

Yes, you claim your expenses even if you didn't have any income. To be deductible, a business expense must be both ordinary and necessary.

 An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business. Irs.gov

To report your self employment expenses:

• Log in to your account.
• Select Federal from the left menu.
• Go to Wages and Income then select Income and Expenses.
• Go to Self-employment income and expenses and click start. you'll be asked some general questions about your business. After you answer them, you’ll be taken to enter your Expenses.