I started a freelance business and did not make more than $5,000 for 2007. Should I still file taxes?

I quit my full time job last year, moved home with my Mom, and started a small freelance business. I pay my own health insurance, and use the income I make with my business to invest more into it. I did not make more than $5,000 for 2007. Should I file taxes? What about State taxes? Also, how does the recent tax rebate affect me? If I don't file, will I not get the rebate? Thank you!

Yes, on freelance business you are required to file a federal return if you make over $400. At under $5000 for the year you won't owe any income tax, but will owe self-employment tax (social security and medicare) of around $700.

For state, it depends on the rules of your state whether you have to file.

You'd most likely have to file a return to be eligible for the rebate. Congress is still debating the details, so it's very likely that some things will still change, and nobody knows what those changes will be.

you should file and itemize deductions and use a schedule c to put down your business expenses and anything that might have cost you out of pocket that was business related. if all that adds up to more than your standard deduction it would be helpful

any income you receive needs to be reported in your federal taxes, its the law

Even though your gross income is below the filing requirements and you won't owe any income tax, business income over 400 is subject to self employment tax (social security and medicare taxes) and needs to get paid. The rebate details are not final yet, but it's possible you will not get any rebate because you will not have paid any income tax, only self-employment tax. Your business income gets reported on Schedule C which attaches to your 1040.

You will still need to file Federal and State taxes. You are correct, if you don't file, then you will not get the rebate.