The amount of profit you can make before paying tax depends on various factors, including your filing status, tax deductions, credits, and other taxable income.

Here’s a general overview…

1. Taxable Income – The amount of profit you can make before paying tax is typically referred to as your taxable income. Taxable income is calculated by subtracting allowable deductions and credits from your total income.
2. Standard Deduction or Itemized Deductions – Taxpayers can choose to claim either the standard deduction or itemize their deductions, whichever results in a lower tax liability. For the tax year 2023, the standard deduction amounts are $12,950 for individuals, $25,900 for married couples filing jointly, and $19,400 for heads of household. Itemized deductions may include expenses such as mortgage interest, state and local taxes, charitable contributions, and medical expenses, among others.
3. Tax Rates and Brackets – Tax rates and brackets determine the percentage of tax owed on different levels of taxable income. The U.S. federal income tax system is progressive, meaning that tax rates increase as taxable income rises. For the tax year 2023, there are seven tax brackets, ranging from 10% to 37%.
4. Tax Credits – Tax credits directly reduce the amount of tax owed, dollar for dollar. Common tax credits include the Child Tax Credit, Earned Income Tax Credit, and various education credits.
5. Other Income – In addition to business profits, taxpayers may have other sources of taxable income, such as wages, interest, dividends, capital gains, rental income, and retirement distributions.
6. Taxable Events – Certain transactions may trigger taxable income, such as selling assets for a profit, receiving rental income, or realizing gains from investments.

It’s essential to consult with a tax professional or accountant to understand your specific tax situation, including any applicable deductions, credits, and tax planning strategies. They can help you optimize your tax position, minimize tax liabilities, and ensure compliance with tax laws and regulations. Tax laws and rates may change over time, so it’s important to stay informed about current tax rules and updates.