Tax Filing FAQs — Can I File Taxes With No Income?
If you made no income, you may be wondering whether it's worth filing a tax return. You may ultimately not have to, though doing so could be beneficial.
Contributing Writer at Tally
March 4, 2022
You may be asking yourself, "Can I file taxes with no income?" Perhaps what you should be more concerned about is whether you need to: "Do I have to file taxes if I have no income?"
We're going to answer all of your tax-filing questions for low-income earners. We'll discuss what the filing thresholds are with the IRS and whether filing is in your best interest. If you earned little to no income last year, this article should prepare you for the upcoming tax filing season.
Can I file taxes with no income?
The short answer to this question is yes. It’s legal for anyone to file taxes with the IRS, regardless of how much they earn. As detailed below, there are standard deductions and income thresholds that define your filing status and determine whether filing is necessary or in your best interest.
It's also worth noting that this only applies to your federal income tax returns. There may be filing requirements for the state that you live or work in. You may want to do a bit of research into your state's tax laws. You can also consider contacting a tax professional or using tax software like those offered by TurboTax and H&R Block to determine if you're allowed to file based on your earnings.
Do you have to file taxes if you have no income?
It's possible to file taxes if you have little to no income, but do you have to?
The answer to that depends on your filing status and how much you earned:
If your filing status is single and you are younger than 65, you don’t have to file an individual income tax return unless your gross income was at least $12,550.
If you're filing as the head of household and you're younger than 65, then you don’t need to file a federal tax return unless your gross income was greater than $18,800.
If you're married filing jointly and both spouses are younger than 65, then you don’t need to file a federal return unless your total gross income was greater than $25,100.
If you're married filing separately, you must file if your gross income was at least $5 for the year, regardless of your age.
The thresholds for filing are higher if you're older than 65.
The income thresholds mentioned above are based on gross income. This is the amount that you earned for the year; not adjusted gross income, otherwise known as taxable income.
The reason for this is what's known as a standard deduction. These are tax deductions that the IRS allows you to take, no questions asked. So, let's say that you earned $12,550 for the year and your filing status is single. If you take the standard deduction, your adjusted gross income is $0. Therefore, you don’t have any taxable income in the eyes of the IRS.
Both the standard deduction and income requirements can change each tax year. As a taxpayer, the onus is on you to file if required. If you don't file or pay your taxes on time, additional penalties can be assessed. Tax filing due dates are typically in April. You may want to do a bit of tax preparation beforehand to verify whether you have to file that year.
Additionally, find out whether you're required to submit local or state tax forms for the year as income thresholds can vary by city and state.
Are there any other situations in which you'd need to file?
For most people, the above income thresholds determine whether you need to file. However, there are a few instances where you still need to file a tax return, even if you earned less than the limits listed above:
Your unearned income, such as those from investments, exceeds IRS thresholds.
You took distributions from a medical savings account or a health savings account. The distributions may or may not be taxable, depending on whether they were used for qualified medical expenses.
Undocumented immigrants and nonresidents must file if they've engaged in U.S. trade or business during the tax year.
You owe money under the "nanny tax."
You took advance credit payments through the Health Insurance Marketplace or wish to claim the Premium Tax Credit.
You earned at least $400 in self-employment income. Be mindful of the fact that you’ll also have to make quarterly estimated payments for the self-employment tax, which covers Social Security and Medicare.
Taxes are unique to everyone. Be sure to understand your personal tax situation when filing. You can e-file your taxes for free through the IRS. This could be a useful option to ensure that you're not mistakenly forgoing a required filing.
Is there any benefit to filing if you're below the required income threshold?
Even if you don't have to file taxes, doing so could still be in your best interest because the IRS or your state filing agency may owe you a tax refund. The only way to claim this money is by filing a return. Here are a few scenarios in which you may be owed a return:
You had income taxes withheld from earnings: If you earned money during the year and your employer withheld income taxes, you may be entitled to a refund.
You’re eligible for the Earned Income Tax Credit (EITC): The EITC is a refundable credit. This means that even if you don’t owe taxes, you may be eligible for a refund. It’s specifically designated for low- or no-income earners.
You’re eligible for the Advanced Child Tax Credit: The Child Tax Credit is for filers with children. It’s a refundable tax credit created under the American Rescue Plan of 2021.
Refunds end up reducing your tax liability. If, after factoring in your tax credits and refunds for the year you overpaid your taxes, you are owed money. As mentioned, you can only receive this money back if you file a tax return.
So, even if you are below the income thresholds and don't owe any money, you may be missing out on money you're owed. You can use this money to help set up an emergency fund or pay off your high-interest credit card debt.
Be mindful of taxes come filing season
If you earned little or no income for the year, you’ve likely asked yourself, "Can I file taxes with no income?" The answer, in short, is yes. Nothing is stopping you from filing an income tax return, even if you think you’re below the required income threshold. Filing could be in your best interest, as you may realize that you are owed a tax refund.
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