How to File Taxes With No Income

Updated on April 9, 2024
At a Glance:
  • If you didn’t have any income last year, you are not required to file a tax return.

  • It allows you to claim refundable tax credits such as the Additional Child Tax Credit or the Earned Income Tax Credit.

  • You can also recover taxes withheld if you earned very little income or were a student.

  • Self-employed individuals with earnings over $400 or those who received health care tax credits must file.

  • Filing helps with future deductions, protects against audits, and allows you to claim credits in subsequent years.
  • If you haven’t earned any income in the last year, you may be wondering how you can file your taxes. We all know that filing taxes is something you cannot avoid, so you have to make sure you always do it on time.

    So, instead of skipping the return just because you didn’t have any income, you must be aware of how to file taxes with no income. This article will teach you what to do in this situation.

    How to File a Tax Return With No Income

    Filing a tax return with no income involves several steps, which can be important for claiming certain tax benefits or credits. Here’s a guide to the process:

    1. Determine Your Filing Status: Decide whether you’ll file as single, married filing jointly, married filing separately, head of household, etc. Your filing status can affect your eligibility for certain credits and deductions.
    2. Gather Necessary Documents: Even with no income, you may have documents such as Form 1099-INT for interest from a bank account, or Form 1098-T if you’re a student. These forms are important for any applicable credits or deductions.
    3. Check for Eligible Credits: Research tax credits that you may be eligible for. Common ones include the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit. These can result in a refund even with no income.
    4. Fill Out Form 1040: Complete IRS Form 1040, the standard federal income tax form. Even with no income, this form is necessary to claim any credits or refunds.
    5. Include Relevant Schedules: Depending on your circumstances, you may need to include additional schedules with your Form 1040. For example, Schedule EIC is required for the Earned Income Credit.
    6. Consider State Taxes: If your state has income tax, check if you need to file a state tax return. Some states have credits or refunds similar to the federal system.
    7. File Electronically or by Mail: Decide whether to file your return electronically or by mail. Electronic filing is typically faster and more secure, but mail is an option if preferred.
    8. Keep Records: Retain copies of your tax return and all related documents. This is important in case of any future inquiries from the IRS or for your personal records.
    9. Track Your Refund: If you’re expecting a refund, you can track its status through the IRS’s “Where’s My Refund?” tool.
    10. Seek Assistance if Needed: If you’re unsure about any part of the process, consider seeking help from a tax professional or utilizing free tax preparation services offered by organizations like the IRS Volunteer Income Tax Assistance (VITA).

    Remember, filing a tax return with no income can be important for accessing certain tax benefits or credits, so it’s worth considering even if you’re not legally required to file.

    Minimum Income to File Taxes

    The tax filing threshold is the minimum income level at which you are required to file an income tax return with the IRS. As of the latest information, for most taxpayers, this threshold is equivalent to the standard deduction amount. This means if your income is below the standard deduction for your filing status in a given year, you generally don’t need to file a tax return. For example, in 2021, the threshold was $12,550 for single filers and $25,100 for married couples filing jointly.

    However, there are exceptions:

    1. Age Factor: If you are over 65, the threshold is higher. For single filers, it’s $14,250, and for married couples, it’s $27,800.
    2. Self-Employed Individuals: The threshold is much lower at just over $400, as they owe payroll taxes.

    It’s important to note that the threshold applies to all taxable income within a year, regardless of potential deductions or credits that might reduce your taxable income.

    Additionally, most Americans pay other types of taxes. Everyone pays a payroll tax of 7.65% on income up to $147,000 (as of 2022), and sales taxes on goods and services, which are paid incrementally.

    Who Can File Taxes with No Income?

    If you had no income in the previous tax year, you’re generally not required to file a tax return, as the IRS sets minimum income requirements that vary annually based on factors like your tax status and inflation. These requirements differ for different filing statuses, such as single, married filing jointly, or married filing separately.

    However, filing a tax return can still be beneficial, even with no income. For instance, you might be eligible for refundable tax credits like the Additional Child Tax Credit or the Earned Income Tax Credit, which can result in a tax refund.

    Moreover, filing is advised if you had a small income in the last year, which could help you reclaim withheld taxes. This is particularly relevant if you were employed for only a part of the year or if you’re a college student with minimal income, allowing you to potentially claim credits like the American Opportunity credit.

    Small Business Owners and 1099 Workers

    For self-employed individuals or small business owners, the rules are different. If you earned more than $400 from self-employment, you are required to file a tax return. This requirement often causes confusion, especially when a contractor’s income is over $400 but below the threshold for W2 employees.

    Additionally, if you received health care tax credits or subsidies in the previous year, filing a return is necessary to continue receiving these benefits.

    Reasons to File Taxes With Little or No Income

    Here are a few reasons you might want to file a return in spite of little or no income:

    1. Identification Purposes: Tax returns often serve as a form of identification for U.S. government and IRS interactions. Filing taxes can simplify future dealings with government entities.
    2. Potential for Refunds: A significant proportion of tax filers receive refunds. This often occurs when employers withhold more income than necessary, and after accounting for deductions like the standard deduction, you might be entitled to a refund.
    3. Access to Tax Credits: Low-income taxpayers may be eligible for various tax credits, such as the Earned Income Tax Credit, educational credits, or the Child Tax Credit. Filing taxes is necessary to claim these benefits.
    4. Time Limit for Refunds: The IRS imposes a time limit for claiming refunds—typically within three years of the due date. For instance, to claim a refund for the 2021 tax year, you must file a return in 2022, 2023, or 2024. Waiting longer may result in forfeiting the refund.
    5. Recommendations for Low-Income Households: The IRS provides specific recommendations for low-income households to file taxes, which can be found under the “Who Should File” section of their guidance.
    6. General Advice for Independent Households: It’s generally advisable for independent adults (not someone’s legal dependent) to file taxes for most years, to take advantage of potential refunds and credits.

    Getting a Refund with Tax Credits

    It is possible to obtain a refund with a tax credit. There are several tax credits offered by the IRS, which can be taken off your taxes and not your income. If the credit you get is higher than the amount you have to pay in taxes, you can sometimes claim this extra credit as a refund.

    Also, even if your tax is $0, you have the chance to qualify for different tax credits, like the Additional Child Tax Credit or the Earned Income Tax Credit, which will then allow you to get a refund. Just bear in mind that filing the 1040 and other tax forms is necessary if you want to be able to claim the credits.

    Furthermore, depending on the age of your child, the American Rescue Plan will boost the per-child credit to $3,000 or $3,600, and this also expands the Child Tax Credit.

    As such, you have to consider this for the 2024 tax return that you will have to prepare the next year. You can get a refund of the credit for 2024, and the IRS can send out advance payments for this starting with July, ensuring that people can get their money pretty fast.

    File Now so You Can Deduct Later

    You cannot claim as much as you want to. It all depends on the IRS. This is because the IRS is the one putting a limit on how much you can claim with certain credits and deductions.

    For instance, if a home office deduction would send your business into debt, you will be unable to claim the home office deduction since it’s too large. You will be able to claim zero business income for that year instead, which will then allow you to move into the next year carrying the leftover deduction.

    Also, you are unable to claim your credits or deduction that carry over if you have no income. However, you will have to file your taxes to be able to claim them in the following year when you are getting an income.

    Protect Against Future Audits

    The last thing you want to happen to you is an audit.

    In terms of auditing old tax returns, the IRS operates under a statute of limitations. When you make sure that you accurately report your information, they can only go back three years in general. But for the current year, it all starts only when you file the tax return.

    Not filing the tax return puts you at risk of having an audit performed by the IRS. So, the IRS says that in situations when you don’t want to file, it’s essential to maintain all important financial records.

    Otherwise, you risk dealing with serious problems, and they can get unpleasant instantly.

    Read More

    Final Thoughts

    Having no income makes things very confusing for individuals who filed taxes in the past, and if you are in this situation, you may be unaware of how to file your taxes right now.

    While filing taxes when you have no income is not mandatory, there are some benefits in doing it, like getting the chance to claim refundable tax credits.

    So, if you’re in this situation, you might want to find out how to file taxes with no income.****

    Make sure to follow the information in this article and you should be successful when starting the filing process.

    Filing Taxes With No Income FAQs

    Do you have to file taxes if you have no income?

    You only have to file taxes if you make above the IRS-imposed income thresholds which vary based on your filing status (single, married, etc.). You can still file your taxes even if you have no income if you choose.

    Can you file taxes with no income but have a child or dependent?

    If you have no income but have a child/dependent, you can still file your taxes. This may allow you to get a refund if the tax credits you’re eligible for are more than your income.

    Do you have to pay taxes if you don’t have a job?

    If you don’t have a job, you will have to file taxes if you meet the IRS’ minimum income thresholds. If you have no income, you are not required to file your taxes but there may be benefits to doing so.

    How can I file a zero-income tax return?

    You can file your zero-income tax return just like any other tax return—through the mail or online.

    How can I file a zero-income tax return online?

    You can file your zero-income tax return online using the IRS’ Free File system or an online tool such as TurboTax.

    What is the benefit of filing a tax return even if you don’t have enough money?

    Even if you have no or low income, filing your taxes can lead to you receiving a refund if your tax credits are more than your income.

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    Frank Gogol

    I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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