How to File Taxes Self-Employed on Low Income

The costliest mistake: thinking “I didn’t make much, so I don’t need to file”

The costliest mistake: thinking “I didn’t make much, so I don’t need to file.” I see this every single year. A part-time freelancer, rideshare driver, reseller, you name it, assumes the income is “too small to matter” and skips the return. That tiny decision can snowball: penalties if you owe self-employment tax, missed refundable credits that could’ve put real cash in your pocket, and no paper trail when you need a mortgage or even a decent car loan. I know, filing feels overkill when you made, what, a few hundred bucks? But here’s the rub…

Self-employment tax kicks in at very low levels. The IRS requires filing if your net self-employment earnings are $400 or more, yes, just $400, for Schedule SE. At that point, you owe self-employment tax, roughly 15.3% (Social Security + Medicare). Skip the return and you’re playing catch-up with penalties: the failure-to-file penalty is generally 5% of unpaid tax per month (up to 25%), and failure-to-pay is typically 0.5% per month. Not trying to scare you, just quoting the rules. And I’ve seen $600 of side income turn into a multi-letter headache because someone ignored it. Been there with clients more times than I can count.

Many who skip filing leave money on the table. Refundable credits can pay out even if you owe $0 of income tax, no return equals no refund, period. Two quick numbers to pin this down:

• Earned Income Tax Credit (EITC): For tax year 2024, the maximum EITC is $7,830 for families with three or more qualifying children and $632 for workers with no children (IRS inflation adjustments for 2024). Even modest earnings can qualify, and the credit is refundable.
• Additional Child Tax Credit (refundable piece): For tax year 2024, up to $1,800 per qualifying child can be refunded, depending on your income and other factors (IRS guidance).

So yes, people with low or even zero income tax liability still get real refunds. I know that sounds backwards, but that’s the design. If you don’t file, none of that hits your bank account. I’m probably oversimplifying the phase-ins and thresholds here, but the point stands.

Filing builds your income history, critical in 2025’s tighter credit market. Mortgage underwriters usually want two years of filed returns for self-employed income. Same story with a lot of small-business credit lines. And with auto delinquencies hitting multi-year highs last year (2024) and staying elevated this year, lenders have gotten pickier about proof of income. No returns, no history, no loan approval or worse pricing. That’s a real cost. I had a client lose a great mortgage rate earlier this year because they “took a break” from filing during a slow year. The bank didn’t care that business had rebounded, they cared about the missing documentation.

What you’ll get from this guide is simple: how to spot when you must file as a low-income self-employed person, how the self-employment tax actually computes, and how to claim refundable credits without tripping over paperwork. If you searched “how-to-file-taxes-self-employed-low-income,” you’re in the right place. And if your income feels “too small,” that’s exactly when filing can matter most, oddly enough.

Do you actually need to file? The $400 rule and when low income still means “yes”

Here’s the cleanest version first, because this trips people up every single year: if your net self-employment earnings are $400 or more, you generally must file a federal return. That’s the IRS rule, Schedule SE for self-employment tax, alongside Schedule C. Even if your total income sits below the standard deduction, that $400 net from gig work, rideshare, hair braiding, Etsy, whatever, still flips the filing switch. Why? Because self-employment tax funds Social Security and Medicare. It’s 15.3% on net earnings, with the Social Security piece only applying up to the wage base. For 2025, the Social Security wage base is $174,900 (SSA data), and the Medicare portion has no cap (there’s an extra 0.9% above certain income thresholds, but if we’re talking low income, you’re likely below that). That’s the rule-of-thumb, not a moral judgment.

Now, the part nobody tells you, filing when you “don’t have to” can actually put money in your pocket. Two big reasons:

• Refundable credits. The Earned Income Tax Credit (EITC) and the Additional Child Tax Credit can pay out even if you had zero withholding. For tax year 2024 (filed earlier this year), the max EITC was $7,830 for families with three or more qualifying children (IRS data). The refundable piece of the Child Tax Credit was up to $1,700 per child for 2024 (IRS). Those aren’t rounding errors. If 2025 is your filing year, numbers will be similar with typical inflation bumps, but the point stands: no filed return, no credits.
• Marketplace insurance reconciliation. If you received a Form 1095-A for ACA coverage, you’re required to file and attach Form 8962 to reconcile the Premium Tax Credit. The enhanced subsidy rules continue through 2025 under current law (the IRA extension), but failing to file can mean losing advance subsidies or having to repay them. I’ve seen people shocked, like really shocked, by a letter asking for subsidy payback because they didn’t file.

Quick pause, yes, it’s a lot of forms. And yes, the gray area is real. Because there’s the federal rulebook, then there’s your state.

States can be stricter. A few examples to make it concrete (numbers matter):

• New Jersey requires a return if your gross income exceeds $10,000 (single) or $20,000 (MFJ), these thresholds have held in recent years (e.g., 2024 NJ guidance). NJ doesn’t mirror the federal standard deduction, so low-income filers can still owe or at least need to file.
• Massachusetts has required filing for incomes above roughly $8,000 in recent years (e.g., 2024). That’s below the federal standard deduction, which catches people.
• Pennsylvania taxes compensation from the first dollar at a flat rate. Practically, you file if you have PA-taxable income and tax due, there’s no federal-style standard deduction shielding you.

One more practical angle, given where the economy is: lenders are picky right now. With auto delinquencies elevated this year and underwriting tighter, filed returns are income proof. If you’re rebuilding cash flow in Q4, gig work spikes around the holidays for a lot of folks, getting a 2025 return on file early next year helps your 2026 loan apps. I know, not glamorous, but banks care about paper trails.

And if you’re wondering about the standard deduction itself: for 2025, the IRS standard deduction is $15,050 (single), $30,100 (married filing jointly), and $22,700 (head of household). Even below these, the $400 self-employment rule still applies because it’s about Social Security/Medicare tax, not income tax per se. Also, filing can recover any withheld taxes and claim those credits we just talked about.

Bottom line, if your net self-employment is $400+, you file. If you got a 1095-A, you file. And if you’re below the threshold, you often still file to chase refundable credits and keep your financial paperwork clean. Sorry, it’s not elegant. But it’s the cheapest way to avoid expensive problems later.

Paper trail that actually works: income, expenses, and the 1099 alphabet soup

Short version: track everything. The IRS taxes income whether or not a form shows up. If you made $200 from a weekend pop-up, $1,300 driving, and $480 reselling sneakers, it’s all income. Yes, even if the platform never sent you a 1099. The reporting rules are about what payers must send; your tax is about what you actually earned.

On forms: the 1099-NEC is typically issued when a client pays you $600 or more in a year (that threshold is longstanding). The 1099-K has been bumpy the last two filing seasons, transition relief, different platform interpretations, and state-by-state quirks. The IRS explicitly said 2024 was a transition year rather than the full $600 rollout, and platforms are still adjusting this year. Doesn’t matter for your return: you report your real totals anyway, form or no form.

Make the process boring and you’ll thank yourself in April. Keep a separate bank account for business. Sweep every payout there. Pay expenses from it. Then categorize monthly, 15 minutes with a coffee beats a 7-hour panic session in March. When I was trading, we closed the books by the 3rd business day each month. Same spirit here. You’ll spot missing deposits, duplicate charges, and those sneaky subscriptions.

What to keep? Digital is fine. The IRS cares that it’s readable and complete, not that it’s on thermal paper from a glovebox.

• Income proof: platform dashboards, payout statements, bank deposits, Zelle/Venmo screenshots tied to business.
• Receipts/records for deductions: supplies, phone/internet percent, software, mileage logs, home office, health insurance (self-employed), and retirement contributions.
• Mileage: keep a log with date, purpose, start/end odometer or a credible app. No, a year-end guess isn’t a log.
• Home office: if it’s regular and exclusive, you can use the simplified method: $5 per sq. ft. up to 300 sq. ft. (IRS simplified option; still current).

Quick reality check, two numbers that help frame this. Self-employment tax is 15.3% on net earnings (that’s Social Security + Medicare; then income tax is on top). And for audits, standard IRS record retention is 3 years after filing, but keep 6 years if there’s any chance of a big understatement. I keep key docs 7 years. Overkill? Maybe. But losing deductions because you can’t find a receipt… yeah, been there.

Now, about uneven income, which, let’s be honest, is most gig work, especially in Q4 with holiday spikes. If you’re front-loaded or back-loaded, consistent records let you use the annualized income method (Form 2210, Schedule AI) to match estimated taxes to when you actually earned the money. Fancy term, simple idea: prove your slow quarters were slow, so you don’t get penalized for not paying as if every quarter was December-level busy.

One more practical note, less formal. If a platform misreports your totals or you get a 1099-NEC that excludes reimbursements you did count (or vice versa), your own ledger wins the argument. Reconcile payouts to bank deposits. If there’s a mismatch, ask for a corrected form, but still file with what’s accurate. I’ve sat in bank credit meetings where clean monthly P&Ls smoothed over ugly one-off issues. Lenders in 2026 won’t remember your 2025 holiday scramble; they’ll look at the paper trail.

Bottom line: forms are clues; your books are the record. Separate account, monthly categories, digital receipts, and a mileage log you’d show your worst ex. Do those, and the 1099 alphabet soup stops being scary background noise.

Forms roadmap without the headache: which forms go where

Okay, clean checklist time. You’re low-income, self-employed in 2025, and you want the shortest path from “I have gig income” to “refund in my bank.” Here’s the stack, in the order you’ll actually touch it.

• Form 1040, your main return. Everything else plugs into this. If you only remember one form name, it’s this one.
• Schedule C, your business income and expenses. One per business. Report your 1099-NECs, 1099-Ks, cash, and subtract legit expenses (phone, mileage, supplies, platform fees, etc.). Keep it honest and specific; generic “misc” raises eyebrows.
• Schedule SE (your self-employment tax. The math uses 92.35% of your net profit as the base, then applies the SE tax rate (Social Security + Medicare) ) that 15.3% you always hear about. Half of this tax becomes an above-the-line deduction on Form 1040.

Then the usual add-ons (pick what applies and ignore the rest:

• Form 8962 ) Premium Tax Credit if you bought health insurance on the Marketplace. You’ll reconcile the advance credit from Form 1095-A. If income came in lower than you estimated, this can bump your refund; if higher, it could reduce it.
• Schedule 8812 (Additional Child Tax Credit. Useful if your CTC is larger than your tax and you need the refundable part.
• Schedule EIC ) Earned Income Credit. Self-employed income counts, but you need records. Mileage logs and payment histories help prove you actually worked. Quick note: the IRS has long said most e-filed returns with direct deposit issue refunds in 21 days (for the 2024 filing season, 9 out of 10 met that timing). Clean documentation helps you land in that group.
• Form 8880, Saver’s Credit for qualifying retirement contributions.
• Form 2441 (Child and Dependent Care Expenses. If you paid for care so you could work, this matters.
• Form 8863 ) Education Credits (American Opportunity/Lifetime Learning). Worth checking if you paid tuition or certain fees.

Don’t miss the above-the-line deductions (they lower AGI, which can increase credits like EITC and the Premium Tax Credit:

• Self-employed health insurance deduction ) on Form 1040 adjustments (not on Schedule C).
• HSA contributions (if you had a high-deductible health plan.
• Retirement contributions ) SEP-IRA or Solo 401(k). These are flexible and friendly to uneven cash flow. I’ve watched more than a few sole props use a late-year SEP contribution to drop into a better credit band (clutch.

Free help that actually works:

• IRS Free File ) for the 2025 filing season, the IRS listed guided software eligibility around $79,000 AGI (tax year 2024 returns). Free Fillable Forms are open to all. If you’re under the limit, use it (the price is right.
• VITA/TCE sites ) in-person help for qualifying incomes. Volunteers are trained; they’ve seen every gig combo. I’ve sat in a VITA room and watched a driver’s EITC swing thousands because someone actually entered mileage correctly (humbling.
• IRS Direct File pilot ) handled limited returns earlier this year for 2023 tax filings; availability varies by state and situation. Check the IRS site before you start.

Last two speed tips:

• E-file and pick direct deposit, it’s faster and cleaner. The IRS reported in 2024 that most refunds on e-file + direct deposit hit within about 21 days.
• Name on the refund account must match (avoid bank rejections. Sounds obvious, but it trips people every season, especially with joint returns.

Quick gut-check: 1040 + Schedule C + Schedule SE are your base. Layer credits (EIC, 8812, 8863), reconcile health insurance (8962), then sweep in adjustments (HSA, SE health, SEP/Solo 401(k)). File electronically, direct deposit, and keep the receipts ) Q4 cash is real this year, but the IRS still wants the paperwork.

Pay less the legal way: deductions, credits, and year-end moves that matter

This is the part where small, boring choices quietly save real money. Income’s light? Good, that’s when clean records and the right boxes checked do the heavy lifting. Keep it simple, keep it compliant, and squeeze Q4 for what it’s worth.

• Home office, You’ve got two routes. The simplified method is $5 per square foot, up to 300 sq. ft. (max $1,500), no need to track utilities, just document the square footage and that it’s an exclusive-use area. Or use actual expenses (rent/mortgage interest, utilities, insurance, repairs) pro-rated by business-use%. Actual can win if costs are high, but it’s paperwork-heavy. Screenshot your floorplan marking the office, jot the square footage in your notes, and keep a dated photo (future-you will thank you in April.
• Vehicle ) Pick one method for the year: standard mileage (use the IRS rate for 2025 and your business miles) or actual expenses (gas, maintenance, insurance, lease/depreciation) times business-use%. Either way, you need a mileage log. Don’t overthink it: start/end odometer on Jan 1 and Dec 31, then log business trips. If you have to reconstruct it now, calendar + maps + gas receipts can get you to a reasonable, defensible number. I once caught a 1,200-mile gap because my calendar showed 3 site visits I’d missed (annoying, but it saved the deduction.
• Self-employed health insurance ) If you pay your own premiums, the SE health insurance deduction knocks down Adjusted Gross Income (AGI). Same with HSA contributions if you’ve got a qualifying high-deductible plan. For 2025, HSA limits are $4,300 self-only and $8,550 family, plus a $1,000 catch-up if you’re 55+ (IRS, announced May 2024). That’s above-the-line, it helps even if you don’t itemize. Move cash in Q4 if you’re short of the limit and the budget allows.
• Retirement to reduce taxable income (A SEP-IRA or Solo 401(k) can shelter profit. Practical rules: you generally must establish a Solo 401(k) by Dec 31 to make employee deferrals; employer contributions can be funded by the return deadline (extensions help). A SEP can be opened and funded by the filing deadline too. In a low-income year, I like Solo 401(k) for flexibility ) you can dial in a small employee deferral now to trim AGI and decide on employer contributions when cash lands in Q1.
• Qualified Business Income (QBI) deduction (Up to 20% of qualified profit after your business expenses and above-the-line adjustments (like SE health and HSA). It often shines when income is low-to-moderate. Quick tip: run the math after you apply SE tax deduction, HSA, and health insurance, because those change the QBI base and the limitation. Services businesses have phase-outs, but plenty of low-income filers qualify cleanly.
• Charitable gifts ) Only itemized deductions count here. Many low-income filers won’t itemize in 2025 because the standard deduction is large relative to typical expenses, so don’t overcomplicate it if it won’t change your tax. If you do itemize, bunching gifts into one year or using a donor-advised fund can help. Keep the receipts either way.

One more Q4 mindset thing. It’s counterintuitive, but sometimes putting $500 into an HSA or Solo 401(k) moves you into a better credit phase-out, which saves another $100-$200 on top of the deduction. Over-explaining this: you reduce AGI, which changes your taxable income, which can restore part of a credit or the full 20% QBI. The punchline is simple, the last dollars you contribute can pull double duty.

Compliance guardrails so you sleep at night:

• Document “exclusive use” for the home office, a desk in the dining room doesn’t qualify. A partitioned corner that’s only for work can.
• Pick and stick on mileage vs actual for the year; keep a consistent log. The IRS has made clear that contemporaneous records carry the day in audits.
• Match plan rules to deadlines (Solo 401(k) setup by year-end for deferrals; funding later is fine. SEP can be last-minute at tax time.
• Use Q4 to true-up ) top off HSA, prepay one necessary business expense you’d buy anyway, and reconcile mileage now, not in March.

Q4 is weirdly powerful this year. Rates are stable, inflation cooled off from last year’s spike, and cash is tight for a lot of solopreneurs I talk to. Keep it boring: square footage noted, miles logged, HSA/retirement topped, and don’t chase deductions you can’t support. That’s the part that actually lowers the bill.

Quarterlies without panic: what to pay, when to pay, and how to avoid penalties

Here’s the simple rule that actually works in the real world: you owe estimated taxes when you expect to owe at least $1,000 for the year after withholding and credits. If your income bounces around (welcome to 2025), your goal is to hit an IRS “safe harbor” so you avoid underpayment penalties, even if your Q4 is choppy.

The safe harbors are mechanical, which I love because it takes emotion out of it:

• 100% of last year’s total tax (from your 2024 Form 1040, line 24). If your 2024 AGI was over $150,000 (over $75,000 if married filing separately), bump that to 110%. Hit those numbers through withholdings + estimates and you’re safe.
• 90% of this year’s total tax (2025). Lower-income filers often use this path because cash flow fits reality better. It’s more accurate if your income dropped this year.

Payment calendar for 2025 estimates: earlier this year were April 15, June 17, and Sept 16. The final one matters now: January 15, 2026. Pay online via IRS Direct Pay (bank transfer, no fee) or EFTPS (good for scheduling). If you overpay a hair, you can apply it to 2026, handy if your first quarter is always slow. And yep, credit card is possible but the processors charge a fee, which I personally hate paying unless I’m pushing a big sign-up bonus.

Irregular income? Use the annualized income method on Form 2210, Schedule AI. That lets you match tax to when you actually earned it. Example: say you made $15k in Q1, $10k in Q2, $0 in Q3 (client vanished), and $45k in Q4 (new contract hit). The standard method would expect even quarterly payments and ding you for being light earlier; the annualized method recalculates each period and often cuts or eliminates the penalty because the income really did arrive late in the year.

Penalty mechanics to keep in mind: the IRS computes underpayment interest quarterly, based on the federal short-term rate + 3 percentage points. The exact rate changes, and it’s not trivial, so underpaying by a few grand for a couple months can add a noticeable bite. The fix is simple: when income spikes, pay promptly using Direct Pay and tag it to the correct quarter if you’re annualizing. I literally keep a calendar reminder because I’ve forgotten mid-project more than once, embarrassing but true.

If 2025 was unusually tough, serious illness, natural disaster, or other reasonable cause, attach Form 2210 and request a penalty waiver. Briefly explain what happened and keep documentation (hospital bills, insurance letters, FEMA notice, etc.). The IRS does grant waivers when the facts are clear. Don’t write a novel; two concise paragraphs work. And if a hurricane or wildfire hit your area this year, check the IRS disaster page, deadlines are sometimes automatically extended for affected ZIP codes.

Cash flow tips for Q4 while rates are still decent on cash: park your estimated tax funds in a high-yield savings account and schedule payments a few days before due dates. It’s not 2022-level yield, but it’s still real money. If things are tight, prioritize hitting the 100%/110% safe harbor over chasing perfection on the 90% path. That trade-off buys peace of mind.

Quick gut-check: if your 2024 total tax was $18,000 and your 2025 is messy, target $18,000 (or $19,800 if you’re over the AGI threshold) across withholdings + estimates. Anything extra at filing is a refund; anything short won’t trigger a penalty under the safe harbor.

Final nudge: set up a one-page working sheet, prior year tax, YTD tax paid, projected Q4 income, and pick the safe harbor you can actually hit. Better a slightly overpaid January voucher than a spring penalty you didn’t need to eat.

Your 60-minute challenge: run the numbers now and keep your refund

Give yourself one focused hour this week, coffee, spreadsheet, receipts, and do a mini-close so April isn’t a fire drill. I do this with clients every October, and honestly, it saves a ton of stress. Here’s the fast pass:

1. Tally YTD income and expenses (through Sept 30 or up to today). Back-of-the-envelope is fine. Net them to estimate profit. If you’re self-employed, multiply that profit by ~92.35% to approximate SE-taxable income, yeah, I know I’m simplifying, but it’s close enough for planning.
2. Check your Q4 estimated tax track. Safe harbor still rules the day: pay in 100% of last year’s total tax (110% if your 2024 AGI was over $150k) across withholdings + estimates, and you avoid penalties even if 2025 comes in higher. The Q4 estimate for the 2025 tax year is due January 15, 2026, put a pin in it.
3. Lock your vehicle method for 2025: standard mileage vs. actual costs. If you want the option to use standard mileage in future years, you need to start with it in the first year the car is used for business. As a reference point, the IRS standard mileage rate was 67.0¢ per mile for 2024 (IRS Notice 2023-239). If your car is pricey, high repairs, or low miles, run a quick comparison, no need to over-engineer, just be consistent.
4. Update home office notes and photos: square footage, exclusive-use proof, and utilities/internet statements. Snap a few time-stamped pics now, future you will thank you when you’re asked to substantiate.
5. Open a separate business bank account if you’re still mixing funds. Cleaner books, cleaner audit trail. I’ve seen messy statements turn a 15-minute question into a 3-hour slog, no badge of honor there.

Credits to pre-qualify now, and the proof you’ll need. If you’re self-employed on a tighter income (yes, the “how-to-file-taxes-self-employed-low-income” crowd), these can be real money:

• Earned Income Tax Credit (EITC): For 2024 returns, the max credit is $7,830 for filers with 3+ qualifying kids (IRS data). Keep income records, kids’ SSNs, and residency proof. Note: income limits apply, don’t self-disqualify without checking.
• Additional Child Tax Credit (refundable): For 2024, up to $1,700 refundable per qualifying child (IRS). You’ll need birth certificates/SSNs and proof the child lived with you over half the year.
• Saver’s Credit: Credit rate 10%-50% of contributions up to $2,000 single / $4,000 MFJ for 2024, so max credit is $1,000 single / $2,000 MFJ, subject to AGI limits. Keep IRA/SEP/Solo 401(k) statements.
• Premium Tax Credit (ACA): The enhanced rule capping premiums at 8.5% of household income was extended through 2025 by law. Save your Marketplace Form 1095-A and monthly premium records.

Reasonable script to follow: “My 2024 total tax was $18,000; my 2025 is volatile. I’ll aim for $18,000 (or $19,800 if I’m over the AGI threshold) in withholdings + estimates. I’ll true-up in April but skip penalties.” Simple beats perfect.

Two dates to actually put on your calendar, don’t trust memory:

• Before Nov 30: one-hour bookkeeping clean-up. Reconcile bank/credit cards, label large expenses, and save receipts to one folder.
• Early February: filing appointment or e-file target. W-2s and 1099s will be in; you’ll file with a calm brain, not caffeine shakes.

Rates on cash are still decent as we sit in Q4, park tax money in a HYSA and schedule the Jan 15 payment a few days early. And yes, I’m aware I’m oversimplifying a few edges here. But the point is momentum. An hour now beats three in April every single time.

Frequently Asked Questions

Q: Should I worry about filing if I only made about $500 freelancing?

A: Yep. If your net self-employment earnings were $400 or more, you’re required to file and calculate self-employment tax (about 15.3% for Social Security and Medicare) on Schedule SE. Skipping it risks penalties: 5% per month for not filing (max 25%) and 0.5% per month for not paying. File the return. It’s cheaper, and cleaner, than fixing it later.

Q: How do I figure out my net self-employment income when I had tiny gigs here and there?

A: Start with all business income (1099-NEC, 1099-K, tips, Cash App/Venmo business payments, etc.). Then subtract ordinary and necessary expenses to get “net.” Common deductions: mileage (keep a log), a portion of phone/internet, supplies, platform fees, and if eligible, a simplified home-office deduction. Report it on Schedule C; that net number flows to Schedule SE for self-employment tax. Keep receipts, bank statements, and platform payout reports. Even small gigs deserve clean records, future you (and your bank) will thank you.

Q: What’s the difference between income tax and self-employment tax when my income is low?

A: Two separate beasts. Income tax is based on taxable income after the standard deduction and credits; at low income, it can be zero. Self-employment tax is separate and covers Social Security/Medicare at roughly 15.3% on net earnings of $400+, even if your income tax is $0. Credits like the Earned Income Tax Credit can be refundable and may offset what you owe overall. If you expect to owe, consider quarterly estimates to avoid underpayment penalties.

Q: Is it better to skip filing this year and deal with it when I make more next year?

A: No, file. Here’s why. First, the IRS requires filing if your net self-employment earnings hit $400+, and self-employment tax (about 15.3%) applies even when your income tax is zero. Penalties stack up: failure-to-file is generally 5% per month (max 25%); failure-to-pay is 0.5% per month. Second, refundable credits are real money you forfeit if you don’t file. For tax year 2024, the maximum EITC is $7,830 for families with three or more qualifying kids and $632 for workers with no kids. The refundable part of the Child Tax Credit can be up to $1,800 per qualifying child for 2024. I’ve watched folks leave thousands on the table by “waiting.” Third, filing builds a paper trail lenders actually like, useful for a car loan or mortgage underwrite. Fourth, paying SE tax earns you Social Security credits, which matter down the road, yes, your future self cares. If cash is tight, file and set up an IRS payment plan; it’s straightforward and reduces penalty pain. Going forward, set aside about 20-25% of net income for taxes and consider quarterly estimates (safe harbors: 90% of this year’s tax or 100% of last year’s, 110% if last year’s AGI was high). If your return is simple, check IRS Free File or reputable low-cost software. Bottom line: filing now is cheaper, cleaner, and usually gets you more money back than skipping.

@article{how-to-file-taxes-self-employed-on-low-income,
    title   = {How to File Taxes Self-Employed on Low Income},
    author  = {Beeri Sparks},
    year    = {2025},
    journal = {Bankpointe},
    url     = {https://bankpointe.com/articles/file-taxes-self-employed-low-income/}
}