Q. Do I need to file a tax return?
A. It depends on your filing status, age, federal income tax withheld and your gross income. In 2021 tax year you don't have to file if your Adjusted Gross Income is below the Standard Deduction which is:
Age below 65
$12,400 for Single
$24,800 for Married Filling Jointly
$5 (not a typo) for Married Filling Separately
$18,650 for Head of Household
$24,800 for Qualifying Widow(er)
Age 65 and over
$14,050 for Single
$26,100 for Married Filing Jointly (one spouse 65 and over)
$27,400 for Married Filing Jointly (both spouses 65 and over)
$5 (not a typo) for Married Filling Separately
$20,600 for Head of Household
$26,100 for Qualifying Widow(er) with one dependent
That said you may want to file even if you are below the threshold just to get back the federal income tax withheld (if any) from your paycheck by your employer.
All taxpayers who are claimed as a dependent on someone’s tax return are subject to different IRS filing requirements. A tax return is necessary if their earned income is more than their standard deduction. However the threshold decreases to income greater of $1,050 or the sum of $350 and the person’s earned income. A dependent’s income is unearned if it comes from sources as interest and dividends.
Q. My sole proprietor business earned only $400 this year and I have no other income. Do I need to file a tax return?
A. Yes, you have to file if your net earnings from self employment are at least $400. That is because you will need to pay into your self-employment social security account.