Just because you don’t have an income, doesn’t mean you shouldn’t file taxes. The thought of filing taxes without any income may seem unnecessary, but there can be some benefits to filing taxes when you don’t have income. By the end, you’ll have a good idea if you should file taxes without income or if you don’t need to file.
Refundable Tax Credits vs Deductions: What is the Difference
A refundable tax credit means you can get a refund if they make your tax liability less than zero. A tax deduction is different since it reduces the amount of income subject to tax. You won’t get a refund from a tax deduction.
Make sure you pause here and understand this before moving on. Knowing this, we can look at why you may want to file taxes with no income.
Filing Taxes with No Income: Why You Still Should
To Claim Your Refund:
Even if you have no income to report, you may still be eligible for a tax refund. As we talked about, refundable tax credits can lead to receiving money back. While having no income is a rare situation, you’d still get the Child Tax Credit provided you meet all the stipulations. These include having a son, daughter, stepchild, eligible foster child, ect. and that they are under age of 17 at the end of the year.
Additionally, they have to live with you and not provide more than half of their own financial support. The need to be a U.S citizen, U.S. national or U.S. resident alien with a social security number too.
Another popular credit is the Earned Income Tax Credit (EITC). Depending on how much you earned and your filing status, you might qualify for this refundable tax credit as well. It is designed to help no low-income tax filers.
Read More:
How Does the American Tax System Work? (Tax System Basics)
When Do You Need to File a Tax Return Vs Not Filing
If your income is under the standard deduction then you don’t need to file a tax return. The single taxpayer standard deduction was $12,950 in 2022. It’s really up to you if you make less than the standard deduction but why not see if you are eligible for refunds like the Earned Income Tax Credit?
So Your Want to Get Your Refund: What to Do?
At this stage, you haven’t made a lot but think you still qualify for a refund or “free money” as quite a few people call it. You can’t get a tax refund unless you file your taxes. To many people’s surprise, you can file your taxes for free online. The IRS has partnered with a bunch of online tax software so you can file taxes for free when you are below certain income thresholds. A few examples are TaxACT, FileYourTaxes and TaxSlayer.
Other free filing options often include local programs for low-income earners and seniors.
Read More:
What is a Form 1099? Everything You Want and Need to Know
Is it Worth it To File Taxes When You Have No Income?
To many people aged 25 to below 65, they will find that it often makes sense to try and file with no to little income. Once you are over 65, it reduces your chances of getting some of the refundable tax credits available.
Keep in mind that if you earn more than the standard deduction then you need to file anyway so it’s not really a choice.
Why You May Want to File Taxes with No Income: Final Thoughts
The big reason to file taxes with no income is to get back refundable tax credits. It’s as simple as that. You may be entitled to a tax refund if you meet certain requirements and didn’t have an income. While it’s certainly a rare situation, if you think it applies to you then double-check, it might just be worth it to file your taxes when you have no income!
