Do I Need to File a Tax Return if I Didn’t Make Much Money?
MTNA Business Network and Charles Harris, CPA
MTNA Business Digest, Volume 5, Issue 2
January 2026
An independent teacher who recently opened a studio asked this question: “I expect to earn less than $10,000 from my home studio this first year, which is less than the standard deduction. Do I need to file a tax return?”
Answer: Great question, especially for teachers who are new to being sole proprietors. It is important to start with a reminder that all income is to be reported to the IRS. For your home studio, you will report your studio income on Schedule C and then also report the expenses that your studio business incurred. Subtracting the expenses from the income will give you the net profit (or loss) for your business.
The net profit number will then be reported on Form 1040 (for most filers), along with other income you might have earned from other jobs or gigs. You will then total up all income sources and deduct a “standard deduction” (set by the IRS, based on your filing status of single, married couple filing jointly, head of household, etc.) or calculate “itemized deductions.” Many filers use the standard deduction, especially early in their careers. However, if you have significant eligible expenses, such as medical costs or charitable contributions, itemizing your deductions might result in greater tax savings.
Subtracting the standard deduction from your total income will yield your “taxable income,” which is the amount on which your federal income tax will be calculated.
Using your example, let’s assume your studio’s net profit is $10,000. After calculating this net profit on Schedule C, you’ll then report this income on Form 1040. The 2025 standard deduction for single filers is $15,750. Therefore, your taxable income will be $10,000 minus $15,750, which is less than zero. For a taxable income of zero or less, you will not owe any federal income tax. But you still filed a tax return to report your studio income.
There are several factors besides income level that influence when and why you need to file a tax return.
If you made more than $400 in net profit as a self-employed teacher (sole proprietor), you will need to file a tax return. You may not owe any federal income tax, but you will owe self-employment FICA taxes, which fund Medicare and Social Security programs.
If you had a second job that hired you as an employee (and issued you a W-2 at the end of the year), then the employer likely withheld taxes from your paychecks. Or you made estimated tax payments for the year. Or you had any of your overpayment for last year applied to this year's estimated tax. To receive a refund of these taxes, you will need to file a tax return.
If you received income from a gig that issued you a Form 1099-NEC or Form-MISC, you should file a tax return to report this income. Many music teachers receive this type of income from freelance performing, adjudicating, or other gigs. These employers may or may not have withheld taxes. You are still required to report all income and are responsible for any income and self-employment taxes that may be due.
If only $10,000 was made during the year, and there were no other sources of income, you still may qualify for other tax credits (Earned Income Credit, for example) and receive money from the government if you file your taxes. Not filing could leave money on the table.
Keep in mind that state tax requirements may vary, and you may be required to file a state tax return even if you are not liable for federal income tax. Check your state’s tax filing thresholds and guidelines.
There are other (less common) reasons to file a tax return. Please seek advice from a professional tax advisor or CPA regarding the specifics of your situation and read more here.
One final reminder: Accurate and detailed record-keeping is essential when filing taxes as a sole proprietor. Be sure to keep receipts, invoices, and documentation of expenses to substantiate any deductions claimed on Schedule C.
Information provided in this article is for educational purposes only.
The MTNA Business Network is a team of successful teachers and business owners dedicated to sharing and promoting best practices for the business of teaching.
Charles Harris is a CPA who works with music schools across the country. Having studied music growing up and in college, he loves helping music teachers with accounting and taxes. Connect with Charles at https://www.musicstudiostartup.com.