Do I have to pay taxes on money my parents give me?
April 16, 2010 5:14 PM Subscribe
You Are Not My Accountant: I'm concerned that I've illegally not paid taxes for the past three years because I assumed that "gifts" and "income" were two separate things.
posted by anonymous to work & money (12 answers total) 3 users marked this as a favorite
I am closing in on forty years of age. My tax record up until I quit my last job is spotless. Since I was not fired or laid off, I did not file for unemployment. I quit because I felt that I had gone as far as was possible in my career-a career I never wanted anyway-and thought I would take a break from "it all" for the first time in my life.
I was able to do this because my parents were willing and able to give me money every year: $3,000 a month. (Yes I know how lucky I am.) I live in a pretty expensive city, but I don't "spend" a whole lot of money (no big-ticket items or fancy meals or the like), so a net of $3k a month is ok enough to live on (I rent with a roommate, and we each pay $700/month, and I have to pay for my own health insurance which costs me $500/month-I can't get a less-expensive plan because I have many prescriptions).
I assumed that since this money was a "gift" from my parents, it was not subject to taxes. I don't know where I got that idea-I think I must have concluded without any evidence that "income" is something you get from working, and that the term didn't extend to mean any money that comes in at all.
I haven't worked any jobs during these few years that would require me to file taxes.
I'm pretty sure my parents didn't claim me as a dependent.
How badly have I screwed myself, and what do I do now?