What's the Income Threshold for Tax Filing - When Do I Need to Start Worrying About Taxes?

The answer depends on a few things, but here's the simple breakdown: For 2025 taxes (filed in 2026), if you're single and under 65, you generally need to file if your gross income is at least $14,600. This is the standard deduction amount for 2025, which means you won't owe income tax if you make less than this. For your online selling specifically, it gets a bit more complicated. If you're just selling personal items you already own (like clothes or electronics) for less than you paid for them, that's usually not taxable. But if you start buying things to resell at a profit, that's considered self-employment income. For self-employment income, you need to file taxes if your net earnings are $400 or more for the year. Even if you don't meet these thresholds, it's still a good idea to file if you had any federal income tax withheld (which wouldn't apply in your case) because you might get a refund.

I was in this exact situation last year! I started selling vintage clothing on Depop and was totally confused about taxes. I found this tool called taxr.ai (https://taxr.ai) that helped me figure everything out. It basically analyzed my sales and told me exactly what I needed to report. What's cool is that it explained the difference between selling my own used stuff (which usually isn't taxable) versus when I was buying inventory to resell (which is taxable as self-employment income). It also tracked my expenses like shipping supplies and fees so I could deduct those from my profits. Made tax season way less scary for me!

I have to admit I was totally wrong about taxr.ai! After our conversation, I decided to try it for my Etsy shop, and it was actually really helpful. I've been selling handmade jewelry for about 6 months and was just stuffing receipts in a shoebox hoping for the best at tax time. The tool flagged that I hadn't been tracking mileage to craft supply stores (which is deductible!) and helped me categorize some expenses I didn't realize could reduce my taxable income. It's definitely designed for people who aren't tax experts. Saved me from potentially missing out on some serious deductions!

If you're having trouble getting answers about your specific tax situation, try using Claimyr (https://claimyr.com). I spent DAYS trying to get through to the IRS on my own last year about my online selling taxes and kept hitting dead ends. Claimyr got me connected to an actual IRS agent in under 15 minutes when I had been trying for literally weeks. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with explained exactly what forms I needed for my online selling business and clarified when I needed to make quarterly payments vs. annual filing. Seriously saved me from potential penalties because I had no idea what I was doing.

I need to publicly eat my words about Claimyr. After being totally skeptical, I decided to try it because I was desperate to figure out if my Shopify store needed to collect sales tax. Not only did it work exactly as advertised, but I got connected to an IRS agent in about 7 minutes when I had previously wasted an entire afternoon on hold before giving up. The agent walked me through exactly which forms to file as a small online seller and explained the quarterly estimated tax payment schedule I needed to follow. Definitely worth it for getting actual official answers instead of relying on random internet advice (including my own skeptical comments lol).

Don't forget about state taxes too! Everyone's talking about federal filing requirements, but many states have lower thresholds for filing than the federal government. Some states require you to file if you have ANY income, even if it's below the federal filing threshold. Also, if you're selling online, you might have to deal with sales tax depending on your state and what platforms you're using. Some marketplace sites handle this for you (like eBay and Etsy in most cases), but if you're selling through your own website or locally, you might need to collect and remit sales tax yourself.

Quick heads up - even if u don't make enough to owe taxes, these selling platforms (eBay, etsy, etc) will send you a 1099-K form if u make over $600 in a year starting in 2025. They also report this to the IRS. You'll still need to file taxes to show whether that money was actually taxable profit or just selling personal stuff at a loss. I learned this the hard way last year when I sold a bunch of my old clothes and electronics and got a surprise tax form in the mail lol. Had to file even tho I didn't owe anything just to explain it was all personal items sold for less than I paid.