Do I Have to File Taxes If I Don't Work?

Your income and taxes owed determine whether you have to file taxes.
i Creatas/Creatas/Getty Images

When you don’t work, it can be for a number of reasons. You might stay home to care for children while your spouse works or you may be a student. Less happily, you might unemployed even though you want to work. In some cases you don’t have to file taxes when you don’t work. Other times, the Internal Revenue Service says it may be to your benefit to file a return even if you are not required to do so.

Amount of Income

If you didn’t work at all during the year, you won’t have any earned income. However, you might have unearned income, such as interest and dividends from investments. The IRS sets minimum income levels that vary depending on your filing status. If your gross income is under the limit, you may have to file. For single taxpayers, the minimum is $9,750 as of 2012. If you are married, the minimum is $19,500 when filing jointly, but it is only $3,800 when filing separately. For a qualified widow or widower, the figure is $15,700. The minimum is $12,500 if you file as head of household. When you are claimed as a dependent, the minimum income for required filing is $5,950. A dependent with unearned income of $950 also has to file a tax return. These figures are updated annually. Check IRS Publication 17 for current amounts.

Special Circumstances

When you are married, you usually file a joint return based on your spouse’s income if you didn’t work. If you are a student, you may need to file to document your income for financial aid purposes or to report taxable grants and stipends. Unemployment compensation is taxed by the IRS as ordinary income. If you received unemployment benefits, you’ll need to file a tax return and pay taxes on your benefits even if you did not work at all during the year.

Other Situations

It’s possible to make some money by engaging in a trade or business occasionally, even though you don’t work. The IRS considers this self-employment. You must file a return and report self-employment income of $400 or more. You also must file if you received taxable distributions from a tax-deferred plan such as an IRA or a Coverdell Education Savings Account. Also, if you owe the IRS money for uncollected Social Security, Medicare or other taxes, you must file a return.

Voluntary Filing

Even if you don’t work and aren’t required to file taxes, it might be a good idea. Suppose you worked for a little while at the beginning of the year. Your employer probably deducted income tax from your paycheck and you may be due a refund. To get the money, you must file a return. You might be eligible to claim one or more tax credits, such as the American Opportunity Credit, Additional Child Care Credit and Earned Income Credit.

the nest