Can I File Taxes With No Income?
Filing taxes can be a confusing process sometimes. Some of the most popular questions people ask about filing taxes include:
- Do I have to file taxes?
- Do I have to file taxes if I don’t work or have no income?
- Do I need to file taxes every year?
- Why file taxes if I don’t have any income?
- How do I file my taxes?
- Can I file taxes with no income?
All of these are valid questions. It can be confusing as to why or when you should file your taxes, especially if you don't meet certain taxable income thresholds. While it isn’t required for you to file taxes if you don’t have any taxable income, it is highly recommended that you do anyway.
You Should File Taxes Even Without Income
Whether you have income or don’t, it's still recommended that you file your taxes on an annual basis. There are a few reasons that justify this argument, including the following:
Claim Refundable Tax Credits
Oftentimes there will be various refundable tax credits that, regardless of your income status, will contribute towards a tax refund in your favor. If you file your taxes you will be able to claim those refundable tax credits. This means you might receive money back on a tax return, even without having paid any taxes on the year.
Some examples of refundable tax credits include the Earned Income Tax Credit or the Child Tax Credit. Assuming you meet the respective criteria for those credits, you will be eligible for a tax credit in your favor.
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Maintain a Record of Income and Filing History
Another great reason to file your taxes even if you don't have taxable income is to maintain a record of income and filing history. At some point, you might be audited by the IRS. It's beneficial to have as long of a history of filing as possible to bolster your case.
Filing your taxes will help you establish a filing history and maintain a steady record of your income over the years.
Stimulus Payments and Tax Benefits
As was the case during COVID, the government will occasionally announce stimulus payments that tax filers can receive access to based on their personal circumstances. In past years, your tax filing determined your eligibility for certain benefits, including the stimulus checks.
Moving forward, filing could be crucial in the future if new government relief programs are rolled out. These often use tax records to determine eligibility.
Protection Against Tax Fraud
Technology dominates the landscape of tax filing and most industries. Unfortunately, this can result in fraudulent tax filings on your behalf if you do not file.
Protect yourself against tax fraud by filing your taxes each year and establishing a presence with the IRS. This should mitigate others from fraudulently using your Social Security Number to claim future benefits or income down the road.
These are some reasons that make it worthwhile to file your taxes, regardless of your income level. The more time you spend researching, the more reasons you'll find to justify filing your taxes with or without income.
How to File Your Taxes
If you’ve decided you should file your taxes, the next step is understanding exactly how to do so. Let’s break it down into a step-by-step basis below.
Step 1: Gather Basic Information
The first step is gathering your basic information. This should include your Social Security Number, home address, full name and proper forms. Gather any respective forms that need to be submitted with your taxes. This could include a W-2 or 1099. Once you've gathered everything, you can begin filing.
Assuming you’re eligible for a refund, have your banking details ready to input so that you can receive your refund directly.
Step 2: Select a Filing Method
There are a variety of filing methods (which will be covered below) that you can choose from. Feel free to use IRS free file, paper filing or one of the various programs or software at your disposal that we'll cover below.
Step 3: Complete Tax Forms
Complete the necessary tax forms that will impact the amount of refund you'll receive (or taxes you'll owe). Fill out the Form 1040 about your income amounts and fill out any sections for refundable tax credits that you are eligible for.
Step 4: Submit & Keep Records
If you're filing electronically, submit everything directly through the IRS website or through the software option you decided to use. If you’re filing by mail, send it to the IRS in your state.
Always keep records of your filings each year, you might need them down the road in the case of an audit.
Programs & Software to Help File Your Taxes
There are a variety of programs and software to help you file your taxes. Below we'll cover two of the best options you can use.
TurboTax
TurboTax is a great option for filing your taxes if you’re looking for comprehensive features and a user-friendly experience. Pay for the account level that you need to complete your tax filing. Assuming you have no income, you can use the free account option!
H&R Block
H&R Block is a great option if you are looking to have in-person assistance during your filing. Contrary to TurboTax, this option has offices that you can go to in-person if you need help or assistance with filing your taxes. Other than that, it’s relatively comparable to TurboTax.
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