Comments on: How do I do taxes when I haven't worked all year?

Question: How do I do taxes when I haven't worked all year?

OccamsRazor — Mon, 06 Apr 2009 13:41:15 -0800

How do I do taxes when I haven't worked all year? Let me explain: I spent all of 2007 saving money so I could spend the first half of 2008 teaching myself a new career path I'm interested in. I had originally intended on picking up a job halfway into the year, but as it turns out I was able to spend the whole year learning. I'm not enrolled in any school, so I'm not technically a student or anything. I also didn't make any money in 2008, I just lived very frugally. So how do I approach taxes?

By: geodave

geodave — Mon, 06 Apr 2009 13:45:49 -0800

Perhaps I'm missing an aspect of your question, but in all the places I know of, there's a minimum income threshold you have to hit before you pay income tax.

So in Ontario for instance if you make less than seven grand or so in a year (though it's been a while since I checked) you don't pay any income tax.

So, chill, ignore your taxes =)

By: wocka wocka wocka

wocka wocka wocka — Mon, 06 Apr 2009 13:47:15 -0800

If you had no income in 2008, you do not owe taxes. Regardless, you should read this and see if it applies to you.

By: mrt

mrt — Mon, 06 Apr 2009 13:48:33 -0800

Might want to file for the 1099-INT forms you got, but of course the first $8000 or so of income isn't taxed so you're cool. It might be a generally good idea to file anyway though, just to let your friends in the IRS know you're still alive.

By: davr

davr — Mon, 06 Apr 2009 13:49:54 -0800

If you didn't make any money, then you shouldn't owe any taxes. If your income is under a certain amount, you are not required to file a tax return. (Don't forget that a lot of things can be considered income...eg if your parents gave you money, or if you made any interest on your savings account). However you should probably do it anyway, it's free, and should take you just a few minutes. (this answer assumes you live in the USA). There's tons of pages that explain if you have to file or not: [1] [2] [3].

It may actually be to your advantage to file, in case you qualify for any credits, you may actually get a refund. At the very least you should complete the return to see what the results are, then decide if you will file it or not.

By: OccamsRazor

OccamsRazor — Mon, 06 Apr 2009 13:57:05 -0800

Thanks for the link Wocka, I'll check it out. I've always had a 9 to 5, so not filing taxes is something quite new to me.

By: politikitty

politikitty — Mon, 06 Apr 2009 14:08:57 -0800

I would go ahead and file. While it's normal for college age kids to not file, it's a bit odder for a typical 9 to 5 to go off the grid.

While you're certainly in your rights to not file, the IRS is also in their rights to audit you to make sure that you're in your rights to not file. Avoid as many red flags as possible. Perhaps include a cover letter that explains the discrepency. It will probably be tossed aside and not looked at again, but it can't hurt.

By: yclipse

yclipse — Mon, 06 Apr 2009 14:10:20 -0800

>if your parents gave you money

No. Not by any means. Gifts are non-taxable to the recipient. And if the amount is under $13,000 per year, there are no gift tax concerns to the donor either.

By: theora55

theora55 — Mon, 06 Apr 2009 16:00:01 -0800

There may be some tax credit that could make it worthwhile to file. Keep records of any income. An audit isn't fun, but in this case, would be painless.

There's a significant savings tax credit for low income people, and maybe others. Well worth checking out.

By: epersonae

epersonae — Mon, 06 Apr 2009 17:27:11 -0800

IIRC, the last stimulus required that you had filed taxes. (Someone I know on disability filed for the first time in years.) So there's that.

By: Fuzzy Dog

Fuzzy Dog — Mon, 06 Apr 2009 23:51:26 -0800

Also, filing will start the audit clock.