Federal Tax minimum?

Question

I am a college student and I own my own business doing videography. I know that the minimum to file federal tax is $8,450 after all deductions have been accounted for (cameras, computers, etc).

What I do not understand is, if I make $8,451, would I pay tax on all of the money or only what exceeded the minimum of 8,450?

Update: I am referring to federal Income tax. I understand that If i make $433 that I must file for business tax (social security etc)

Answer 1

Since you are self employed, you must file your taxes if your income is over 400. You will not owe income tax if your income is under 8450 but you may still owe self-employment taxes. The 8450 is your standard deduction and personal exemption. You will pay income tax on the amount over that. However, if your parents claim you as a dependent, you will lose the personal exemption amount, as they will be claiming that amount. See a tax professional for more in depth information.

Answer 2

Self Employment Tax Minimum

Answer 3

Sorry, but you are misinformed. The filing requirement amount for self-employment income is $400.00, NOT $8,450! If you made over $400 and didn't file a return, better get moving on it! You're late and will owe penalties for late filing and interest and penalties for late payment of tax.

If you have net income of $8,450 and are claimed as a dependent on your parents' tax return, you'll owe $1,293 in Self Employment Tax plus about $330 in Income Tax for 2006. If you're not claimed as a dependent, you won't owe any Income Tax, but would still owe the $1,293 in Self Employment Tax.