If you have no income, you typically aren't required to file a tax return. But many people choose to do so anyway. You may need to file a return to qualify for federal financial aid or other government programs. If you pay for college, you may want to file a return to claim education credits. Or you may simply be one of those people who likes to dot every "i" and cross every "t." Regardless of your reason, filing an tax return with no income is a fairly easy process.
If you have no income, you can probably use the easiest tax form, appropriately named Form 1040EZ. This one-page form is for most people who are filing as single or married filing jointly, and will claim no dependents or credits. Fill out your personal information at the top of the form and put zeroes on all the lines except Line 5. On Line 5, check the correct box if you or your wife will be claimed by a dependent by another taxpayer, and enter your standard deduction based on the amounts listed on the form.
If you are 65 or older, filing separately from your spouse, claiming dependents or an education credit, you may need to use Form 1040A. The form is fairly straightforward. Fill out personal information for you and your dependents at the top of the form, and put zeros on all the lines that ask for income. Claim $0 in taxes owed on Line 45. If you are claiming the education credit, complete Form 8863 and enter the amount of your credit on Lines 40, 41 and 42 of the 1040A.
Form 1040 usually is used for claiming items such as business income, credits and tax deductions. But there are a few instances where you may need to use the more complex 1040 even if you have no income. For example, you may have business losses that you want to carry forward to the next year, or you may need to pay household employment taxes if you pay a housekeeper or other domestic employee.
Generally, if you don't have income, you cannot benefit from tax credits. Most credits available to tax filers are nondeductible credits; they can only be used to reduce the amount of taxes you owe that year. The Child Tax Credit is an example of this type of credit. The other type of credits, deductible credits, are paid to you even if you don't owe taxes, but almost all of them require that you have earned income or own a business. The Earned Income Tax Credit is an example of this type of credit.
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