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If you've been 1099ed, what is the most you can earn annually without having to file taxes?

Answers:1   |   LastAnswerAt:2009.12  

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visitor
Katy 
Asked at 2009.12.18 23:47:22
I'm 21 and I've never had to file taxes because my income has always been under the limit but I don't know what the limit is. In addition, I got W2ed in 2005 but I have no idea what that means but people keep telling me I might be eligible for a refund. Help!
answer emeraldsky21  Answered at 2009.12.18 23:47:22
When you work for wages your employer has to send you and the government a W2 that has your gross wages, federal and state income tax withheld, social security withheld and medicare withheld and any other information regarding your wages. In 2005 your employer probably withheld income taxes from your paycheck, you should have received a W2 last year that showed how much. If you were under the filing limit and didnt file then the government gets to keep that money withheld thats why its always good to file even though you dont have to - just to get your income tax withholding back.

1099's are a whole different story. There are many kinds of 1099's, i.e 1099-INT (interest earned), 1099-DIV (dividends earned), 1099-S (sales of property), 1099-G (government payments), 1099-MISC (miscellaneous income). If you received a 1099-MISC and in box 7 (Nonemployee Compensation) the amount was more than $400 you must file a tax return, because the IRS will assume that it is from self-employment and the IRS requires anyone with more than $400 in self-employment income to file a tax return.

You should contact a tax professional and have them look at your 2005 tax information and your 2006 information. It might cost a little but it will work out in the long run. You can see if you were entitled to a refund in 2005 and if you were "1099ed" in 2006 they will tell you that you should or should not file based on the amounts and then after this year you will have a little bit more of an understanding on how taxes work. Think of it as a little life lesson.
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