What is the maximum dollar amount one can earn, before they have to pay “federal” income tax?

There's no one number that's the limit. Depends on a number of things like your age, filing status, whether you're a dependent. The $400 is the limit for self employment income - you'd have to file at that point, and pay self employment tax for social security and medicare, not income tax. The limit is $5800, for someone whose income is on a W-2, if they are a dependent. If they'r not a dependent, 9500. These limits go up a little almost every year - these numbers are for 2011. Numbers are slightly higher for people 65 and older, and someone filing as head of household. There are still other limits for dependents with unearned income, and for someone filing as married filing separately.

As so often, you "heard" a lot of partial truths and misinformation You are confusing having to file a tax return with having to pay taxes--not at all the same thing If one has $400 in self employment income, one must file a tax return If a Dependent has $5800 in wages, or a non-Dependent has $9500 in wages, they MUST file a tax return. . . . .doesn't mean they owe anything Depends on income received, on withholding, on whether they repay student loans, on whether they contribute to IRA or 401k, etc.

your first pay check as employee - u will pay federal taxes. U may get them back if u earn under 600$