The preparation and submission of a federal income tax return is an annual task for the majority of US residents and citizens. However, what if you earned no income during the past year? You can enquire about whether or not you are required to submit a tax return or possibly whether there is a benefit in filing a return yourself. Being aware of the requirements and benefits will allow you to make an educated choice.
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When are you required to file a tax return?
The Internal Revenue Service (IRS) establishes some income limits that dictate whether individuals need to or should file a tax return.
They depend on filing status, age, and source of income received. For the tax year 2024, the general rules are:
- Single filers under age 65: Are required to file if gross income is $14,600 or more.
- Single filers age 65 and older are required to file if their gross income is $16,550 or more.
- Head of Household under 65: File if gross income is $21,900 or more.
- Head of Household 65 or older: File if gross income is $23,850 or more.
- Married filing jointly, both spouses under 65: File if the combined total gross income is $29,200 or more.
- Married filing jointly with one spouse 65 or older: File if combined gross income is $30,750 or more.
- Married filing separately of any age: Mandatory if gross income is $5 or more.
- Qualifying widow(er) under 65: Mandatory if gross income is $29,200 or more.
- Qualifying widow(er) 65 or older: Mandatory if gross income is $30,750 or more.
Remember that even if your income is less than these amounts, there are a few cases that will still require you to file a tax return:
- Self-Employment Income: If you had net self-employment income of $400 or more, you must file a return.
- Advance premium tax credit: Individuals who received advance payments of the Premium Tax Credit to lower the cost of health insurance must file a return to reconcile the payments.
- Retirement account distributions: Distributions from a retirement plan, such as a 401(k) or an IRA, require you to file a return under certain conditions of amount and your age.
No income tax to pay
Just because you aren’t obligated to file a tax return doesn’t mean you should avoid filing. You can, in fact, gain in some ways by doing so voluntarily:
- Refundable tax credits: Some tax credits are refundable, and you can receive a refund even if you owe no taxes. An example is the Earned Income Tax Credit (EITC) for low- to moderate-income workers. If you earned little or nothing but otherwise qualified, you might receive a refund.
- Recovery rebate credit: If you did not get the full amount of any stimulus payments (Economic Impact Payments) you were eligible for, you may report the Recovery Rebate Credit on a tax return.
- Withheld taxes: If federal income tax was withheld from wages or other income during the year, the only method to recover those withheld taxes is to file a tax return.
Possible consequences of not filing when required
Perhaps you can be late filing without penalty, and you will still lose:
- Penalties and interest: Tax owing from you can carry penalties and interest from the IRS when you fail a deadline to file a return.
- Loss of refunds: There’s an expiration date for claiming refunds. For example, the IRS said taxpayers typically have three years to get their refunds; otherwise, the funds are forfeited to the Treasury.
- Effect on future benefits: Failing to file a tax return can affect your eligibility for certain government benefits that are taxable.
How to file a tax return with no income
If you have no income, it is easy to file a tax return:
- Get documents you received: Obtain any tax documents you received, such as Forms W-2, 1099, or 1095-A (Health Insurance Marketplace Statement).
- Choose a filing method: You may e-file with the IRS Free File if you have income at or below a level, or by mail.
- Fill out the appropriate forms: For most taxpayers, this will be Form 1040. Be sure to fill in all of the necessary information, even if it’s zero.
- Claim any credits you can get: Even though you do not take home any income, you can still get some credits, such as the EITC or the Recovery Rebate Credit.
- File your return: File your return on April 15, or when appropriate, to avoid any issues.
