Does one get charged on how much they have in the bank
October 5, 2012 12:02 AM Subscribe
Does one get charged on how much they have in the bank? For example, let's say that I make $800 a month, which I assume is too little to file for taxes (is it?), but I have like $50,000 in my bank (not earning enough interest to consider for taxes). Will the government charge me a lot more and make me pay taxes? I was talking with a friend (who's not an expert with finances btw) and he claimed that his dad used to make a negative $30,000 income a year, yet he still got taxed because he had tons of money stored in his bank. And then my friend claimed that the only way not to get taxed is to keep the money outside the bank away from where the IRS can see it. I am confused. I thought you get taxed based on what you earn, not how much you have just sitting around in a bank. My theory was that one can have million dollars in the bank but if they don't earn anything that year, not even in interest, then they don't pay or file taxes. Can anyone clear up for me?
posted by kopi to Work & Money (30 answers total) 6 users marked this as a favorite